IDBI Bank shares crashed after Fairfax deal; should you buy this to reap profits later? Will they rise? Experts' views
IDBI Bank-Fairfax Stake Sale | IDBI Bank share price target: Shares of IDBI Bank witnessed a sharp sell-off on Thursday after the announcement of the Government of India (GoI) and LIC offloading their shareholding in IDBI Bank to Prem Watsa-famed Fairfax. In this IDBI Bank's stake sale, the Indian Union Cabinet approved the sale of a 60.72% stake in IDBI Bank to Fairfax Financial Holdings for ₹52,878 crore, valuing the IDBI Bank shares at ₹81 apiece. However, the banking stock saw some value buying during the Opening Bell. IDBI Bank's share price today opened at ₹83.70 per share, edging higher against the previous day's close of ₹83.45 per share, and touched an intraday high of ₹84.10 per share. However, the stock failed to sustain at higher levels and came under the profit-booking pressure, sparking debate over whether the Hyderabad-born Canadian investor and CEO of Fairax will be a lucky charm for the bank and its shareholders.
According to stock market experts, the GoI's divestment plan may transform IDBI Bank from a traditional lender into a diversified financial services company offering banking, insurance, wealth management and investment banking. However, they maintained that such a transformation doesn't happen overnight and it takes time. So, long-term investors may take advantage of this crash in IDBI Bank shares and begin accumulating them in a calibrated manner.
Highlighting the reason for IDBI Bank's share price slide, Avinash Gorakshkar, Founder of Avinash Mentor Research, said, "The IDBI Bank stake sale is aimed at meeting the SEBI guidelines and its FY27 divestment target of ₹80,000 crore. However, it doesn't mean they will offload their entire stake. They would remain there, along with the expertise of Prem Watsa, the CEO of Fairfax. However, this will take time and the recent crash should be seen as a panic sale. Once the IDBI Bank-Fairax stake sale is complete, even after that it will take time for the IDBI Bank to get transformed from a normal Indian lender to a diversified financial services provider company.
Expecting the IDBI Bank share price crash to end soon, Abhinav Tiwari, Sr. Research Analyst at Bonanza, said, “At around 1.37x June 2026 book value and 11.5x annualised Q1FY27 earnings, much of the deal-related optimism may already be priced in.”
The Bonanza expert said that future returns will depend on improving return on equity. Fairfax has proposed contributing its interests in Go Digit Life Insurance, Go Digit General Insurance and IIFL Capital Services to IDBI Bank after acquiring control. The plan could transform IDBI Bank from a traditional lender into a diversified financial services company offering banking, insurance, wealth management and investment banking.
Abhinav Tiwari of Bonanza said that IDBI Bank's stake sale is an important step for the government’s disinvestment programme. The focus now shifts from deal completion to earnings growth, execution and future share supply. Other PSU stocks may benefit from expectations of privatisation, but the timing and outcome of each sale remain uncertain.
“I am betting high on Fairfax Financial Holdings CEO Prem Watsa. The India-born Canadian billionaire investor has already hinted that there will be no job cuts at IDBI Bank after the stake sale. This means IDBI Bank will see some innovations with a fresh workforce, while combining with the existing workforce. This means there will be either status quo or some business diversification taking place after the stake sale, which is expected to be completed by the end of the current financial year,” said Avinash Gorakshkar.
Decoding the technical chart pattern of IDBI Bank shares, Ganesh Dongre, AVP — Equity Research at Anand Rathi, said that on the weekly chart, IDBI Bank continues to hold above its previous breakout channel in the range of ₹70 to ₹75, indicating a positive technical structure. The sustained price action above this breakout zone suggests that the stock may be witnessing accumulation and that the broader bullish trend remains intact.
“As long as the stock sustains above this important support area, the possibility of further upside remains open. Investors holding the stock can maintain their positions with a stop-loss in the ₹68 to ₹70 range to manage downside risk. On the upside, the stock could move towards the target zone of ₹100 to ₹110, provided the prevailing bullish momentum continues and the breakout structure remains intact,” said Ganesh Dongre of Anand Rathi.
Asit Manohar has nearly two decades of experience in the mainstream media. In this period, he has served esteemed media organisations like NDTV Profit, The Economic Times, and Zee Business. He has been working at LiveMint Digital since April 2021. During these two decades of journey in mainstream media, Asit has mainly covered external affairs, markets and personal finance. However, his earliest beats include railways, SME, MSME, and politics (Congress beat). Some of his features on political, economic, and foreign policy are documented in the parliamentary records. <br><br> While pursuing his MA (Mass Communication, Session 2004-06), Asit began his media career as a stringer at All India Radio in Varanasi. At AIR Varanasi, Asit worked with the Gyanvani, Yuvvani and Vividh Bharti teams. After working for nearly one year at AIR Varanasi, he shifted to print journalism and started working as a stringer for the HT Media Ltd, Varanasi. At HT Media Ltd in Varanasi, he covered the BHU beat. <br><br> Asit has also worked with some brokerage houses. He has worked with Religare Broking and India Infoline, where he assisted the research team in developing and executing trade strategies for intraday cash, F&O, and commodities. <br><br> Asit is a Gold Medalist in MA (Mass Communication) from BHU, Varanasi. He did his BSc. (Hons) in Mathematics from Magadh University, Bodh Gaya. Asit was a National Talent Scholarship holder during his senior secondary studies (1988-91).
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