Fairfax Appoints Deepak Parekh and Paresh Sukthankar as Advisers for IDBI Bank Acquisition

Fairfax Financial Holdings, led by Canadian billionaire Prem Watsa, is set to enhance its strategic direction for IDBI Bank by appointing notable financial experts as advisers. Deepak Parekh, the former chairman of HDFC Ltd, and Paresh Sukthankar, the former deputy managing director of HDFC Bank, will lend their expertise as Fairfax moves forward with its acquisition of a 60.72% stake in IDBI Bank, valued at approximately ₹52,878 crore. The company has also proposed N S Kannan, a seasoned executive with a background in ICICI Bank, as the prospective chairman of IDBI Bank, contingent upon approval from the Reserve Bank of India (RBI). Rakesh Sharma will maintain his role as the managing director and CEO of the bank.

The decision to bring in these experienced advisers comes as Fairfax aims to solidify its position in the Indian banking sector. Parekh's leadership at HDFC, which he helmed from 1993 until its merger with HDFC Bank in July 2023, and Sukthankar's integral role in establishing HDFC Bank in the mid-1990s, are expected to provide valuable insights as Fairfax integrates IDBI Bank with its other financial entities, including Go Digit Insurance and IIFL Capital Services. Watsa emphasized the potential for significant benefits to Indian consumers and businesses through this strategic consolidation.

In addition to the leadership changes, Fairfax is required to adhere to RBI regulations, which mandate a gradual reduction of its stake in IDBI Bank from 60.72% to 26% over a 15-year period. Specifically, the group must lower its shareholding to 40% within the first decade, followed by a further reduction to 26% in the subsequent five years. This structured approach reflects Fairfax's commitment to regulatory compliance while pursuing its long-term vision for the bank.

The anticipated completion of the acquisition is slated for the first quarter of 2027, pending necessary regulatory approvals. Fairfax plans to finance this transaction through a mix of cash reserves, dividends from its subsidiaries, asset sales, and contributions from its other financial services, without resorting to long-term debt.

Looking ahead, Fairfax is also evaluating its 40% stake in CSB Bank, with a two-year timeline to determine the future course of action. The strategic moves by Fairfax highlight its ambition to create a robust integrated financial services group in India, aiming to deliver long-term value and innovation in the sector.