Fairfax Financial Holdings plans to consolidate some of its existing Indian financial services investments under IDBI Bank, creating a diversified financial services group, the Canadian investment firm said in a statement, Reuters reported.
The move came after the Indian government approved the sale of a 60.7% stake in to Fairfax in a transaction valued at ₹52,878 crore ($5.56 billion) on Tuesday. The deal is among India’s largest cross-border banking transactions.
Under the proposed arrangement, Fairfax plans to transfer its 30.2% holding in IIFL Capital Services and its 49% stake in Digit to IDBI Bank, thus, positioning the lender as the holding company for all three businesses. The group would span banking, insurance, investment banking and wealth management.
How the restructuring will pan out
The restructuring is subject to approvals from banking and insurance regulators. is also seeking to increase its stake in IIFL Capital Services to 51% through an open offer, the company said.
Digit, founded by Kamesh Goyal, operates Go Digit General Insurance and Go Digit Life Insurance. IIFL Capital Services, founded by Nirmal Jain and R Venkataraman, has businesses in investment banking and wealth management.
The proposed group will be headed by IDBI Bank’s current chief executive, Rakesh Sharma. CV Rajendran, former chief executive of , and NS Kannan, former managing director and CEO of ICICI Prudential Life Insurance, are also expected to take leadership positions, with Kannan set to become chairman.
Fairfax said the proposed restructuring would not lead to changes in the governance, management or operating structures of Digit or IIFL Capital Services.
Govt to retain minority share in IDBI
Prime Minister Narendra Modi-led Cabinet Committee on Economic Affairs on Wednesday approved the sale of 60.72% stake in IDBI Bank to Fairfax Financial Holdings’ subsidiary, M/s 10955230 Canada Inc., for ₹52,878.08 crore.
The government and LIC would let go of 30.48% and 30.24% of holding in the bank. The government will still retain a 15% stake in the bank while LIC will keep 19%.
“The Government of India and LIC will jointly retain a 34% stake in the restructured entity. Retaining this 34% stake will significantly enhance the value of the holdings held by both the Government of India and LIC,” Union Minister Ashwini Vaishnaw while interacting with reporters.
Fairfax have offered ₹81 per share of IDBI Bank.
CBS Bank says not involved in any discussions
IDBI Bank recorded a net profit of ₹9,513 crore in FY26. Established in 1964 as a development financial institution, it transitioned into a commercial bank in 2004.
CSB Bank, in which Fairfax holds a substantial stake, in a statement on Thursday said that it was not involved in any discussions or negotiations over a possible merger with IDBI Bank.