IDBI Bank's shares have experienced a notable surge, driven by the nearing of the strategic sale's financial bidding stage. This movement reflects growing investor confidence and positive market sentiment surrounding the bank's future prospects.
Strategic Disinvestment Nears Completion
The government's strategic disinvestment plan for IDBI Bank is progressing steadily, with key regulatory clearances in place. The Share Purchase Agreement (SPA) has received clearance from the Inter-Ministerial Group (IMG). The next step involves the Core Group of Secretaries on Disinvestment reviewing the SPA, after which financial bids are expected to be invited, potentially in early September. The government aims to conclude the stake sale within the current financial year, with expectations of mobilizing between ₹40,000 crore and ₹50,000 crore through the transaction.
Bidding Process and Key Considerations
The Expressions of Interest (EoIs) from potential buyers were submitted in January 2024. Clarifications sought by the three shortlisted bidders on the draft SPA caused a minor delay, but the government anticipates a smooth process moving forward. Once the SPA receives final approval, the financial bidding process will formally commence. While a reserve price will be determined for the sale, it will remain confidential.
Several entities have expressed interest in acquiring a stake in IDBI Bank, including Fairfax India Holdings, Emirates NBD, Oaktree Capital and Kotak Mahindra Bank. These potential buyers are currently conducting due diligence and assessing the bank's valuation before submitting their bids. The Reserve Bank of India (RBI) has already completed its "fit and proper" assessment of the potential buyers.
Stake Details and Government's Plan
Currently, the government and Life Insurance Corporation of India (LIC) hold a combined 95% stake in IDBI Bank. The ongoing disinvestment process involves the sale of a 60.72% stake, comprising 30.48% held by the government and 30.24% held by LIC. Post-sale, the government and LIC will retain a 34% residual stake in the lender. The government intends to sell its remaining 15% stake in tranches through an offer for sale, capitalizing on potential share price increases after the acquisition by a private entity.
Market Performance and Investor Sentiment
IDBI Bank has demonstrated strong market performance, gaining for seven consecutive days and trading close to its 52-week high. On June 30, 2025, the share price rallied as much as 3% to ₹105.16 on the NSE following reports of the government inviting bids. Earlier in the day, the stock price surged as much as 5% to an intraday high of ₹106.32 on the National Stock Exchange. This surge reflects positive investor sentiment and the anticipation of increased activity as the financial bidding process approaches. Trading activity has been significant, with nearly 9 million shares exchanged and a total value of around ₹91.88 crores. The stock is trading above its 5-day, 20-day, 50-day, 100-day, and 200-day moving averages, signaling a strong upward trend.
Financial Performance
IDBI Bank has shown strong financial performance, with a 25.38% jump in net profit since the same period last year, reaching ₹2,087.49Cr in Q4 2024-2025. The bank's net profit rose 31% year-on-year to ₹1,908 crore for the December quarter. The net non-performing assets (NPAs) to net advances stood at 0.18% for the quarter, down from 0.34% in the year-ago quarter.
