IDBI Bank shares climb 4% as government nears financial bid phase

IDBI Bank climbs 4% on reports of financial bids;

Shares of IDBI Bank rallied 4 percent to Rs 105 per share on June 30 after reports surfaced that the Centre is gearing up to invite financial bids for the lender

As per a report by CNBC-TV18, the government is close to finalising the share purchase agreement with potential buyers, and may soon seek approval from the ministerial panel overseeing the deal.

The IDBI Bank stake sale, which has faced multiple delays over the last three years, is considered a key part of the government's broader divestment strategy. Notably, IDBI Bank shares have surged 35 percent year-to-date, vastly outperforming the Nifty 50 index’s 7 percent rise.

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At present, the Union government and the Life Insurance Corporation of India (LIC) jointly own 95 percent of IDBI Bank. Of this, a 60.72 percent stake is earmarked for sale under the ongoing disinvestment programme.

This sale marks a shift in the Centre’s approach to asset monetisation. Unlike previous years, the Union Budget 2025 did not set a fixed disinvestment target. Instead, it consolidated disinvestment receipts along with asset monetisation gains into a single budgetary line—"miscellaneous capital receipts"—estimated at Rs 47,000 crore.

While the previous fiscal brought in a modest Rs 30,000 crore from disinvestment, officials remain optimistic that high-ticket divestments like IDBI Bank will help the government meet fiscal needs in FY26.

From a financial standpoint, IDBI Bank posted a strong 26 percent year-on-year rise in net profit for the January–March 2025 quarter (Q4FY25), reporting Rs 2,051 crore compared to Rs 1,628 crore in the same period last year (Q4FY24). However, Net Interest Income (NII) declined 11 percent to Rs 3,290 crore from Rs 3,688 crore year-on-year.

On the asset quality front, the bank saw continued improvement. Gross Non-Performing Assets (GNPA) fell to 2.98 percent from 3.57 percent in the December 2024 quarter (Q3FY25), while Net NPA eased to 0.15 percent from 0.18 percent.

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