IDBI Bank Gains Nearly 4% on Privatisation Revival Reports
Shares of IDBI Bank Limited climbed to a day high of Rs 72.35 on 19 May, after a Bloomberg report said the government is actively exploring ways to revive the bank’s long-stalled privatisation process. The story behind the move is fairly straightforward. The previous attempt to sell the government’s stake... The post IDBI Bank Gains Nearly 4% on Privatisation Revival Reports appeared first on Equitypandit.
Shares of IDBI Bank Limited climbed to a day high of Rs 72.35 on 19 May, after a Bloomberg report said the government is actively exploring ways to revive the bank’s long-stalled privatisation process.
The story behind the move is fairly straightforward. The previous attempt to sell the government’s stake in IDBI Bank was shelved in March because bids came in below the minimum price set by the government.
Now, according to people familiar with the matter cited by Bloomberg, one option being considered is cutting that reserve price by as much as 20% to attract buyers back to the table.
Officials have also signalled their willingness to restart talks with interested buyers, including Fairfax Financial Holdings, the Canadian firm that had emerged as a leading contender in the previous round.
Emirates NBD was among the interested parties evaluated during the process. Both the Finance Ministry and IDBI Bank declined to comment on the Bloomberg report.
The government and Life Insurance Corporation of India together hold around 95% of the bank. The planned transaction involves selling a combined 60.7% stake, which would be one of the biggest government-backed banking stake sales in recent years if it goes through.
Finance Minister Nirmala Sitharaman confirmed in April that the disinvestment plan remains on track, saying publicly: ‘IDBI disinvestment will go on.’
Worth noting: the options being discussed are still at an early stage and could change. No formal announcement has been made.
The stock has had a rough year. IDBI Bank is down 30.46% year-to-date and 19.51% over the past 12 months, sharply underperforming the broader market. At 10:55 am on NSE, shares were trading at Rs 72.15, up by 3.81% on the day.
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The post IDBI Bank Gains Nearly 4% on Privatisation Revival Reports appeared first on Equitypandit.
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