IDBI Bank gets approval to sell a 60.72% stake to Canadian financial firm Fairfax due to Q2 profit drops 39% . IDBI Bank is currently in the spotlight for two major reasons. First, the central government has approved the sale of its own stake, along with that of LIC , totaling 60.72% in the bank to Fairfax Financial Holdings. Second, the bank has released its financial results for the second quarter of the 2026-27 FY, which show a decline in net profit compared to the previous year.
However, to fully understand the story behind this decline in profit, it is necessary to look at the figures from the previous year. While the bank’s core interest-based business has grown this time, it did not benefit from a large, one-off gain that had boosted the previous year’s figures. Given this, it would not be sufficient for investors to look solely at the decline in profit.
Latest News About IDBI bank
On October 14, 2026, the Central Government approved the proposal to sell a 60.72% stake in IDBI Bank. As part of this deal, the government will sell its 30.48% stake, and the Life Insurance Corporation of India (LIC) will sell its 30.24% stake. A company associated with Canada’s Fairfax Financial Holdings will pay ₹52,878 crore to acquire this stake. The price for the deal has been set at ₹81 per share.
This marks a significant step in the bank’s privatization process. However, receiving government approval does not mean the deal is concluded immediately; necessary regulatory clearances and other procedural steps are still pending. Following this news, investor interest in IDBI Bank shares has increased. Yet, the prospect of a major investor coming on board does not, in itself, guarantee an rise in the share price. The bank’s future business performance will be equally critical.
IDBI Bank Q2 Results FY27
IDBI Bank reported a net profit of ₹2,205 crore for the second quarter ending in September 2026. In the corresponding quarter of the previous financial year, the bank’s profit stood at ₹3,627 crore. Consequently, there has been a decline of approximately 39% in net profit on a year-on-year basis. While the results may appear weak at first glance, a one-time gain from the previous year plays a significant role in this outcome.
Last year, the bank recorded a one-time gain of approximately ₹1,699 crore from the sale of its stake in NSDL. The absence of a similar gain this time resulted in lower ‘other income,’ which impacted the year-on-year comparison. According to the reported figures, if this one-time gain from the previous year were excluded from the comparison, the bank’s net profit would have grown by about 14% year-on-year. This does not mean that the decline in profit should be overlooked; to get an accurate picture, it is essential to distinguish between core banking operations and one-time income.
IDBI Bank Financial Results –
| Financial Data | Sep Q FY27 | Corresponding Quarter of Previous Year |
|---|---|---|
| Net Profit | ₹2,205 crore | ₹3,627 crore |
| Net Interest Income (NII) | ₹4,228 crore | ₹3,285 crore |
| Other Income | ₹1,353 crore | ₹2,489 crore |
| Operating Profit | ₹2,893 crore | One-time gain contributed to higher profit |
| Operating Expenses | ₹2,688 crore | ₹2,252 crore |
| Net Interest Margin (NIM) | 4.11% | 3.71% |
Note: The figures are based on published quarterly results and business reports. There may be minor discrepancies due to rounding in different reports.
Net Sales and Revenue –
In the banking sector, looking at ‘net sales’— as one might for a typical company—is not always the most appropriate approach. For banks like IDBI Bank, metrics such as total income, net interest income, and other income serve as more useful indicators.Net interest income represents the difference between the interest a bank earns from loans and other interest-generating activities, and the interest it pays out on deposits and borrowings.For this quarter, IDBI Bank’s net interest income stood at approximately ₹4,228 crore—an increase of nearly 29% compared to ₹3,285 crore in the previous year. This indicates growth in the bank’s core interest-based business.
On the other hand, ‘other income’ declined to ₹1,353 crore, down from ₹2,489 crore in the previous year. The base for comparison was higher last year due to a one-time gain from the sale of a stake in NSDL.Total revenue and net interest income are not the same thing. Similarly, it would be incorrect to label the ₹4,228 crore figure as the bank’s total revenue or net sales. The metrics used in the published data should be understood by the specific terms by which they are identified.
What is the difference between EBITDA and operating profit ?
When reviewing the financial results of companies in the stock market, the EBITDA figure is frequently encountered. However, for banks, EBITDA is neither as useful nor as comparable a metric as it is for typical industrial companies, because interest expenses for a bank are an integral part of its core business operations. Therefore, to understand the performance of IDBI Bank, it is better to focus more on metrics such as Net Interest Income, Net Interest Margin, Operating Profit, Net Profit, and data regarding bad loans.
The bank’s reported operating profit for this quarter stood at approximately ₹2,893 crore, which is about 18% lower than the previous year. This comparison is also affected by a one-time gain that was included in the ‘other income’ from the previous year. It would not be appropriate to provide an estimated figure in the absence of a comparable EBITDA figure explicitly stated in the bank’s report.
IDBI Bank interest-based business Strength or Week
A positive aspect of this quarter’s figures is the growth in net interest income, which rose by approximately 29% year-on-year to reach ₹4,228 crore. The net interest margin also increased from 3.71% in the previous year to 4.11%. This indicates that the bank is achieving a better spread between its interest-earning assets and its cost of funds. On the other hand, however, operating expenses have risen. In the September quarter, these expenses increased to ₹2,688 crore, compared to ₹2,252 crore in the same period last year—an increase of about 19%. The challenge for the bank going forward will be how well it can control its expenses while maintaining the growth of its business.
IDBI Bank Asset Quality
Looking solely at profit is not enough to understand a bank’s financial health. It is also essential to examine what portion of the loans extended by the bank is not being repaid on time. At the end of September 2026, IDBI Bank’s Gross NPA ratio stood at 2.12%, compared to 2.30% at the end of June 2026. A year-on-year comparison also indicates an improvement in the bank’s asset quality. The Net NPA ratio for the September quarter was 0.17%. While this figure was 0.21% in the same period last year, it represents a marginal increase compared to the 0.16% recorded in the June quarter.Therefore, the picture is not entirely one-sided. The improvement in Gross NPA is positive, while the slight increase in Net NPA compared to the previous quarter is something that will need to be monitored.
What might change at IDBI Bank with the arrival of Fairfax ?
The proposed investment by Fairfax could lead to changes in IDBI Bank’s management, business strategy, and future expansion plans. The entry of a major investor might provide the bank with a new strategic direction; however, the actual outcomes will depend on how decisions are implemented moving forward. Investors should also understand that the sale of a stake and the bank’s day-to-day financial performance are two separate matters. News of privatization may influence future expectations, However, bank earnings, loan quality, and operating expenses will remain significant even in the long term. Regulatory approvals for the deal, changes in management, and future business plans will be key aspects to watch going forward.
Should Invest in IDBI Bank Stock ?
Recent news regarding IDBI Bank contains both positive and negative aspects. On one hand, the approval for the sale of a stake to Fairfax has sparked discussions about the bank’s future. On the other hand, there has been a decline of approximately 39% in reported net profit. However, an increase in net interest income, an improvement in the net interest margin (NIM), and a reduction in gross non-performing assets (NPAs) are positive indicators. Nevertheless, it is important to keep an eye on rising operating expenses and the decline in ‘other income. Before investing, one should analyze the stock’s current price, valuation, potential risks, necessary deal approvals, and upcoming quarterly results. Making a decision to buy or sell based solely on news of privatization would not be advisable.
At The End
October 2026 is a significant period for IDBI Bank. The approval for the sale of a 60.72% stake to Fairfax could influence the bank’s future direction; meanwhile, second-quarter results indicate that despite growth in the core interest-based business, the reported profit was lower than that of the previous year. To understand this decline in profit, it is important to consider a one-time gain from the previous year related to NSDL. Moving forward, investors should focus on the quality of the bank’s earnings, its expenses, non-performing assets (NPAs), and the progress made in the privatization process.
