IDBI Bank shares tumble as government sells majority stake to Fairfax

IDBI Bank shares plunged on Thursday after the Indian government and LIC approved the sale of a 60.72% stake to Fairfax Financial Holdings. The cabinet cleared a deal worth ₹52,878 crore, valuing each IDBI share at ₹81. At the opening bell the stock traded at ₹83.70, up from the previous close of ₹83.45, and briefly hit ₹84.10 before falling back. Analysts said the drop reflected panic selling rather than fundamentals. Avinash Gorakshkar of Avinash Mentor Research noted the sale meets SEBI’s FY27 divestment target of ₹80,000 crore but does not mean the government will exit completely; Fairfax’s CEO Prem Watsa will bring expertise and no job cuts are expected. Abhinav Tiwari of Bonanza pointed out the stock now trades around 1.37 times June 2026 book value and 11.5 times Q1FY27 earnings, suggesting much of the deal optimism is already priced in. Fairfax plans to add its holdings in Go Digit Life Insurance, Go Digit General Insurance and IIFL Capital Services, aiming to turn IDBI into a diversified financial‑services group offering banking, insurance, wealth management and investment banking. Ganesh Dongre of Anand Rathi saw the weekly chart holding above a ₹70‑₹75 breakout channel, indicating a bullish structure; he set a stop‑loss around ₹68‑₹70 and a potential upside target of ₹100‑₹110 if momentum holds. ## Context The sale is part of India’s broader push to privatise public‑sector banks and raise funds for the fiscal deficit, while also reshaping IDBI’s business model toward a full‑service financial platform.