IDBI Bank rallies 17% as FM Sitharaman proposes to sell entire govt stake

Shares of IDBI Bank surged up to 17.4 per cent to Rs 39.8 on the BSE on Saturday after finance Minister Nirmala Sitharaman said that the government would sell its entire stake in the bank to private players.

The finance minister made the announcement while presenting the Union Budget for financial year 2020-21.

At 12:52 pm, the stock was trading at 16.96 per cent higher at Rs 36.65 apiece. In comparison, the benchmark S&P BSE Sensex was at 40,632.99, down 0.22 per cent.

The government, which continues to be a promoter, holds around a 46.5 per cent stake in IDBI Bank, and is classified as a private bank following LIC’s acquisition. In September, Life Insurance Corporation (LIC) of India and the Government together infused Rs 9,300 crore as equity capital into the bank.

Recently, Parliament approved Rs 9,300 crore capital infusion in IDBI Bank. The department of financial services got an additional Rs 4,557 crore for infusion into IDBI Bank through recap bonds for their share of 47.11 per cent in IDBI Bank. State-owned LIC, which is the promoter of the debt-ridden lender with 51 per cent stake, will pump in an additional Rs 4,743 crore to improve the bank's capital position.