IDBI Bank share price crashes 6% but LIC is up 1% | Prem Watsa-led ₹52,877 crore Fairfax deal decoded for investors
IDBI Bank stake sale: IDBI Bank share price crashed over 6.57% in Thursday's trading session after government's decision to sell over 60.72% stake in the bank to Canada's Fairfax Financial Holdings.
IDBI Bank shares opened at ₹89.86 per share on NSE today, as compared to previous close of ₹90.39 on Wednesday and touched an intraday low of ₹83.62 on 14 October.
Meanwhile, LIC share price rose nearly 1% on NSE, touching an intraday high of ₹401.90 per share on Thursday.
The Cabinet Committee on Economic Affairs (CCEA) on Wednesday cleared the sale of a 60.72% stake in IDBI Bank to Fairfax Financial Holdings, founded by Indian-born Canadian billionaire Prem Watsa, for ₹52,877 crore. The transaction is expected to be one of the biggest foreign investments in India’s banking industry.
The proposed deal comprises the Centre’s 30.48% stake in IDBI Bank and Life Insurance Corporation of India’s (LIC) 30.24% holding. Following the completion of the transaction, the government is likely to retain a 15% stake in the bank, while LIC will continue to hold 19%, taking their combined shareholding to 34%.
Union Minister Ashwini Vaishnaw said the strategic partnership would bring fresh capital into IDBI Bank and create new growth opportunities for micro, small and medium enterprises (MSMEs), small businesses and aspiring entrepreneurs.
Fairfax has an established presence in India through Fairfax India Holdings Corporation, which reported assets worth $3.8 billion as of June 30, 2026. Its other investments in the country include non-banking financial services firm IIFL Capital and online brokerage platform 5paisa.
The proposed transaction comes at a time when the ongoing conflict in the Middle East is putting pressure on government finances, while weak foreign capital inflows have added to the pressure on the Indian rupee.
According to Seema Srivastava, Senior Research Analyst at SMC Global Securities, for IDBI Bank, the transaction represents a significant ownership change that could improve operational efficiency, corporate governance, capital allocation and long-term business growth. However, the immediate share-price reaction may remain volatile because the stock had already rallied approximately 9% on 14 October 2026.
“With the previous closing price around ₹90.44, significantly above the agreed acquisition price of ₹81, investors may book profits or reassess the stock’s near-term valuation. The acquisition price should not be considered a guaranteed floor for market trading, and the formal open-offer terms will be an important factor for minority shareholders,” she said.
Meanwhile, Gaurav Garg, Head - Research, Lemonn, recommended investors to avoid fresh buying at elevated levels and wait for price stability before entering and existing investors to consider holding with appropriate risk management, provided the investment aligns with their risk appetite.
“Technically, the ₹92–93 zone is an important resistance area, while ₹81–82 is a key support zone to watch. A sustained breakout above resistance could improve the short-term outlook, whereas a breakdown below support could increase selling pressure. The bank’s September-quarter financial results, scheduled for October 17, will also be important in assessing earnings performance and the sustainability of the recovery,” Garg said.
He further added that IDBI Bank offers a potential long-term turnaround opportunity, but investors should not make fresh buying decisions based solely on the privatisation announcement.
Vaamanaa covers business and stock market news. Started in 2020, she has been producing news on digital platforms for over 4.5 years now. She writes on markets, commodities, IPOs, and industry. She has worked for news channels like Jagran New Media and Business Insider India. You can reach out to her at vaamanaa.sethi@htdigital.in.
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HomeMarketsStock MarketsIDBI Bank share price crashes 6% but LIC is up 1% | Prem Watsa-led ₹52,877 crore Fairfax deal decoded for investors
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