At 03:00 pm, the stock was trading 16 per cent higher at Rs 39, as compared to a 0.67 per cent rise in the S&P BSE Sensex. The trading volumes on the counter jumped over eight-fold. A combined 10.35 million equity shares, representing 5 per cent of free-float equity of the bank, changed hands on the NSE and BSE.
According to a CNBC-TV18 report, the inter-ministerial feedback has been received for IDBI Bank divestment and will be up for an in-principle approval from the cabinet soon.
News agency, PTI on Tuesday, October 13, quoting finance ministry official sources, reported that the Union Cabinet will soon consider new public sector enterprises policy that will define strategic sectors, which will not have more than four PSUs.
On the privatisation of banks, the sources said the government is going as per the plan as far as the strategic sale of government stake in IDBI Bank is concerned.
The government currently owns a 47.11 per cent stake in IDBI Bank. In January 2019, Life Insurance Corporation (LIC) completed the acquisition of 51 per cent controlling stake in the lender. The state-owned life insurer infused Rs 21,624 crore into the bank. Finance Minister Nirmala Sitharaman in the Budget had proposed plans for the sale of the government's remaining stake in IDBI Bank, the report said. CLICK HERE TO READ FULL REPORT
Meanwhile, on September 30, ICRA upgraded short-term ratings of IDBI Bank and revised outlook to stable from negative. The ratings remain supported by the majority sovereign ownership of the bank with the demonstrated track record of capital infusion by LIC and the GoI to shore up the bank’s capital ratios above the regulatory levels. However, the GoI (47.11 per cent shareholding) has already announced its intention to fully divest its stake in IDBI.
Furthermore, the principal shareholder’s (LIC) ability to infuse capital is restricted by the regulatory constraints regarding an increase in its shareholding in the bank beyond the current level of 51 per cent. Accordingly, the mode of future capital raising by the bank remains to be seen, ICRA said. CLICK HERE FOR FULL REPORT