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Business Standard
5 days ago
- Business
- Business Standard
What's driving IDBI Bank shares higher? Stock zooms 36% in 4 weeks
IDBI Bank share price today IDBI Bank shares gained 4 per cent today to hit a high of ₹104.40 on the BSE in Thursday's intraday trade amid heavy volumes. In the past two trading days, the stock price of the private sector lender has rallied 6 per cent. Further, in the past four weeks, it has zoomed 36 per cent. Currently, IDBI Bank is trading close to its 52-week high level of ₹107.98, which it had touched on July 29, 2024. It has bounced back 58 per cent from its March 2025 low of ₹66.14 on the BSE. At 09:59 AM, IDBI Bank share price was quoting 2 per cent higher at ₹102.45, as compared to 0.52 per cent rise in the BSE Sensex. The counter saw huge trading volumes today with 14.57 million shares, cumulatively, changing hands in the first 45 minutes of trading on the NSE and BSE. What's driving IDBI Bank stock price higher? The government has been working on the privatisation of IDBI Bank for over two and a half years. On October 07, 2022, the Department of Investment and Public Asset Management (DIPAM) released a Preliminary Information Memorandum and invited expression of interest (EOI) from interested parties for a stake sale of up to 60.72 per cent in IDBI Bank, including the stake of the Government of India (GoI) (30.24 per cent) as well as Life Insurance Corporation of India (LIC) (30.48 per cent). Even as the process to dilute their respective stakes in IDBI has progressed, the conclusion and eventual finalisation of new stakeholders is still awaited. According to a PTI report, 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, according to a Reuters report, the Indian banking regulator is signalling possible rule changes ahead that would let foreigners own more of India's banks, spurred by overseas institutions' eagerness for acquisitions and the fast-growing economy's need for more long-term capita. IDBI Bank results For the January to March 2025 quarter (Q4FY25), IDBI Bank reported a 26 per cent year-on-year (Y-o-Y) increase in net profit at ₹2,051 crore, compared to ₹1,628 crore in Q4FY24. However, Net Interest Income (NII) declined by 11 per cent Y-o-Y to ₹3,290 crore from ₹3,688 crore last year. The bank showed improvements in asset quality with Gross Non-Performing Assets (GNPA) dropping to 2.98 per cent, down from 3.57 per cent in the December 2024 quarter (Q3FY25), while Net NPA declined to 0.15 per cent from 0.18 per cent. 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 a significant pool of highly provisioned stressed assets, which is likely to support its core profitability. "Though the capitalisation profile was supported by capital infusion in the past by LIC and the GoI, IDBI Bank has remained profitable since FY21. Notwithstanding the sufficient internal accruals and capital position for growth, the Reserve Bank of India's (RBI's) implementation of the expected credit loss (ECL) framework for credit exposures and additional provisioning on infrastructure financing remain monitorable," rating agency Icra said in January 2025. However, the strong capital cushions provide support for such transition(s). Although the ratings are based on IDBI's stand alone credit profile, any change in its parentage will be monitorable, it added. About IDBI Bank IDBI Bank, founded in 1964, is a private sector bank headquartered in Mumbai. It was a public sector bank till February 2019 with the GoI holding a majority stake. In January 2019, LIC increased its stake in the bank to 51 per cent by infusing capital of ₹21,624 crore, resulting in the dilution of the GoI's ownership to 46.46 per cent as on January 24, 2019 from 85.96 per cent. LIC maintained its holding at 51 per cent during the subsequent capital raise of ₹9,300 crore in September 2020, while the GoI's share remained at a similar level of 47.11 per cent. However, LIC and the GoI's stakes in the bank declined to 49.24 per cent and 45.48 per cent, respectively, after it raised capital via a qualified institutional placement (QIP) in FY2021. Given the decline in the GoI's majority shareholding, the Reserve Bank of India (RBI) classified IDBI as a private sector bank w.e.f. March 2019.
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Business Standard
18-05-2025
- Business
- Business Standard
Slew of PSU stake sales soon; govt plans to divest 6.5% in LIC in tranches
The government plans to divest a 6.5 per cent stake in Life Insurance Corporation (LIC) of India in tranches over the next 24 months, while kicking off a slew of share sales in central public-sector enterprises (CPSEs) this financial year to meet the stock market regulator's minimum public shareholding (MPS) mandates. 'This year, we will follow a strategy of regular offers for sale (OFS) in small tranches. We are officially giving forward guidance for small investors to look out for it,' Department of Investment and Public Asset Management (Dipam) Secretary Arunish Chawla told Business Standard in an interview. While most CPSEs are now compliant with the MPS norms that require at least 25 per cent of public shareholding for listed firms, a few firms in sectors like defence, railways, and the financial sector are still lagging. 'We are actively pursuing their disinvestment. Hopefully, within the next one year, we would like them to achieve MPS norms,' he stressed. The deadline for five public-sector banks like Bank of Maharashtra and UCO Bank to meet the 25 per cent public shareholding mandate is August 2026, while the Securities and Exchange Board of India (Sebi) has permitted LIC to raise its public stake to 10 per cent by May 16, 2027. The insurance behemoth was listed in May 2022 with a 3.5 per cent dilution of the government's stake. 'We will do this (LIC) disinvestment in small tranches, keeping in mind the liquidity conditions and the need to give small investors a fair chance to participate,' the secretary said. Diluting a 6.5 per cent stake in LIC would fetch the Centre ₹35,256 crore according to its current market price.
