IDBI Bank shares rise for second session on govt's stake sale plan

IDBI Bank stock extended gains for the second straight session today amid a report that the government was considering selling at least 51 per cent of its stake in the lender. IDBI Bank stock rose 5.81 per cent in the afternoon session to Rs 45.5 against the previous close of Rs 43 on BSE.

On  Thursday, the banking stock hit an intraday high of Rs 44.20, rising 10.09 per cent  on BSE. In a year, the share has gained 18.34 per cent but fallen 3.34 per cent since the beginning of this year. Total 20.37 lakh shares changed hands amounting to a turnover of Rs 9.12 crore. Market cap of the lender rose to Rs 48,278 crore on BSE.

IDBI Bank shares were trading higher than the 5-day, 20-day, 50-day, 100-day and 200-day moving averages. The stock hit a 52-week low of Rs 30.50 on June 30, 2022 and a 52-week high of Rs 65.25 on October 18, 2021. The government along with state -backed Life Insurance Corp. of India, together own about 94 per cent in IDBI Bank. According to a Bloomberg report, the government officials and LIC are in discussions about how much of their stakes they plan to sell.

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Both parties are likely to retain a stake in the lender after the sale. A ministerial group will make the final decision on the structure of the deal, the Bloomberg report said. The government and LIC will formally seek buyer interest at the end of September, the report added. While the government owns 45.48 per cent in the bank, LIC owned another 49.24 per cent stake in the lender as of June 30, data has shown.

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In the first quarter of this fiscal, the bank reported a 25 per cent rise in its standalone profit after tax (PAT) to Rs 756 crore for the quarter ended June, led by an improvement in asset quality, better recoveries and lower provisions. The bank reported a profit of Rs 603 crore in the corresponding quarter a year ago. Provisions fell 43% to Rs 1,295 crore from 2,265 crore a year earlier.

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