Shares of IDBI Bank plunged about 14 per cent after reports said the Indian government may scrap the current stake sale process due to bids falling below the minimum price
Shares of IDBI Bank tumbled sharply on Monday after reports suggested the Indian government may scrap the current process to sell a majority stake in the lender, triggering heavy selling in the stock.
The stock fell more than 14 per cent during early trade, putting it on track for its biggest single-day decline since June 2024. By around 11:38 am IST, shares were trading about 13.09 per cent lower at Rs 79.18 on the NSE Nifty 50-tracked exchange platform.
The sharp drop came after media reports said the government plans to shelve the bids received for the privatisation of the lender, as the offers were below the minimum price set for the transaction.
According to a report by Reuters, the existing sale process could be scrapped and a fresh round of bidding may be initiated later when market appetite improves.
Privatisation effort faces setback
The Indian government and Life Insurance Corporation of India together hold a controlling stake in the lender. The government owns about 45.48 per cent of the bank, while the insurance giant holds roughly 49.24 per cent.
In 2022, the two shareholders launched a plan to sell around 60.7 per cent of the bank as part of New Delhi’s broader privatisation drive aimed at reducing state ownership in the financial sector.
The proposed deal had attracted interest from global investors, including Fairfax Financial Holdings and Emirates NBD, according to a Reuters report in February.
However, the report said the bids received fell short of the government’s reserve price, prompting authorities to reconsider the ongoing process.
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