IDBI Bank rallies 5%, hits 11-month high; stock rises for 7th straight day

According to reports, the Government could soon finalise a share purchase agreement with potential buyers for the divestment of IDBI Bank

IDBI Bank share price today

 

IDBI Bank shares hit an 11-month high of ₹106.34 on the BSE in Monday's intraday trade, amid heavy volumes, in an otherwise weak market on reports that the government is close to the financial bid phase in the bank's privatisation journey. The stock price of the private sector lender is trading at its highest level since July 2024. It had hit a 52-week high of ₹107.98 on July 29, 2024.

 

Notably, shares of IDBI Bank are quoting higher for the seventh straight trading day, ralling19 per cent during the period. At 12:09 PM, the stock was quoting 4.4 per cent higher at ₹105.72 as compared to a 0.32-per cent decline in the BSE Sensex. Average trading volume on the counter more-than-doubled with 34.51 million shares, together, changing hands on the NSE and BSE.  CATCH STOCK MARKET LATEST UPDATES LIVE 

 

Why is IDBI Bank share price rising today?

 

According to a report by CNBC-TV18, the Government could soon finalise a share purchase agreement with potential buyers, and may seek approval from the ministerial panel overseeing the deal. Business Standard couldn't verify the report.

 

The government has been working on the privatisation of IDBI Bank for nearly three years. On October 07, 2022, the Department of Investment and Public Asset Management (DIPAM) released a Preliminary Information Memorandum, inviting expression of interest (EOI) from interested parties for a stake sale in IDBI Bank.

 

As on March 31, 2025, Life Insurance Corporation of India (LIC) and Government of India (GoI), together, hold 94.71 per cent shareholding in the bank, and have stated their intent to divest their shareholding in the bank through a strategic stake sale with an intent to handover management control in the bank, for which, the process is underway. The extent of the respective shareholding to be divested by GoI and LIC will be decided at the time of structuring the transaction, in consultation with the Reserve Bank of India (RBI).

 

DIPAM Secretary Arunish Chawla, in April, said the government has appointed asset valuers for valuation of IDBI Bank and is also deliberating the share purchase agreement to be signed with a prospective buyer.

 

Meanwhile, CARE Ratings expects the bank to receive required support from GoI and LIC to enable smooth divestment of the shareholding.

 

"Our 'stable' outlook on IDBI Bank factors in the expectation that the bank will continue growth in advances and deposits and maintain profitability, while maintaining comfortable capitalisation and steady asset quality parameters," the rating agency said in rationale.

 

"Although the bank witnessed steady business (advances and deposits) growth, its share in sector advances and deposits has declined from the peak levels as on March 31, 2017. This is due to the growth restrictions under the prompt corrective action (PCA) framework and the subsequently low growth rate in comparison to the sector average. Further, IDBI's ability to maintain and grow the core deposit base upon the change in ownership would be monitorable,' ICRA had said in its rationale dated January 17, 2025.

 

IDBI Bank Outlook

 

Apart from the steady growth in advances and the consequent improvement in its core income and profit, IDBI Bank continues to benefit from the recoveries from significantly provisioned stressed assets. The operating profitability is supported by strong recoveries from written-off accounts while credit and other provisions also remained low, supporting the overall profitability.

 

The Bank has been scaling up its granular loan portfolio, comprising retail and priority sector segments, while augmenting its well-rated corporate loan book with an optimal mix of fund and non-fund exposures. Bank, while growing its advances portfolio, has also been focusing on maintaining a healthy loan portfolio and managing its credit risk effectively by strengthening its credit underwriting process and close monitoring of its loan accounts, IDBI Bank said in its FY25 annual report.