Fairfax Financial Holdings will consolidate its Indian financial services investments by bringing IIFL Capital Services and Digit under IDBI Bank after acquiring a 60.7% stake in the lender for ₹52,878 crore ($5.56 billion), the Canadian firm said this week. The Indian government approved the transaction on Tuesday, marking one of the largest cross-border banking deals in India.
Under the arrangement, Fairfax plans to transfer its 30.2% stake in IIFL Capital Services and 49% stake in Digit to IDBI Bank, making the bank the holding company for all three entities. This restructuring aims to create a diversified financial services group spanning banking, insurance, investment banking, and wealth management. The government and LIC are expected to retain a combined 34% stake post-sale, with the deal pending regulatory approvals.
The deal positions IDBI Bank as a comprehensive financial services group, combining Fairfax’s existing investments in banking, insurance, and wealth management. This move follows a trend of consolidation in India’s financial sector, where large conglomerates seek scale and diversification. The ₹52,878 crore transaction ranks among India’s largest cross-border banking acquisitions, underscoring growing foreign investor interest in the country’s financial services market.
The restructuring awaits final approvals from regulators before completion. The Indian government’s stake in IDBI Bank will reduce to around 25.6%, while Fairfax’s holding will rise to 60.7%. The combined group will cover a broad spectrum of financial services, leveraging Fairfax’s existing stakes in IIFL Capital and Digit alongside IDBI Bank’s operations.