IDBI Bank: IDBI Bank shares rose nearly 7 per cent to Rs 94 per share on July 18 after the Reserve Bank of India (RBI) issued a ‘fit and proper’ report on bidders, moving the divestment process ahead. IDBI Bank has been under consideration for privatisation for several years, and the government was awaiting RBI’s assessment on bidders meeting the “fit and proper” criteria – or complying with regulations and not being under scrutiny of other regulators – to move to the next stage of the process. The central government holds a 45.5 per cent stake in IDBI Bank, with LIC being the largest shareholder with over 49 per cent stake. The plan involves selling 60.7 per cent stake in the bank, including the government’s 30.5 per cent stake and LIC’s 30.2 per cent. After the RBI completes the scrutiny process, the government will provide qualified bidders access to confidential IDBI Bank data, including employee pension fund and insurance or medical coverage details.
To qualify, bidders for IDBI Bank must have a minimum net worth of Rs 22,500 crore and have reported net profits in three of the last five years. A bidding consortium can have up to four members, and the successful bidder must lock in at least 40 per cent of equity capital for five years. In its Q1FY25 business update, IDBI Bank reported a 13 per cent growth in total deposits to Rs 2.7 lakh crore year-on-year (YoY), up from Rs 2.4 lakh crore in the same period last year. Net advances also grew 17 per cent to Rs 1.9 lakh crore in Q1FY25 from Rs 1.65 lakh crore in Q1FY24. The state-run bank’s stock has rallied over 33 per cent so far this year, while the benchmark Nifty50 has gained 12 per cent. Earlier, IDBI Bank had hit a 52-week high of Rs 98 per share on February 6, 2024.
