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Shares of IDBI Bank hit a 52-week high of Rs 55.60 as they rallied 5 per cent on the BSE in Tuesday’s intra-day trade amid heavy volumes. The stock of private sector bank surpassed its previous high of Rs 54.75 touched on December 10, 2021. It quoted higher for the fourth straight trading day, and has surged 15 per cent during this period.
At 12:18 pm; IDBI Bank traded 3.4 per cent higher at Rs 54.95, as compared to 0.55 per cent rise in the S&P BSE Sensex. The trading volumes at the counter jumped 1.5 times, with a combined 38.18 million equity shares changing hands on the NSE and BSE.
In past two trading days, the stock price of the IDBI Bank gained 9 per cent after the finance ministry on Sunday said that IDBI Bank will continue to operate as an ‘Indian private sector bank’ after its strategic sale and the government’s residual 15 per cent stake in the lender post privatisation will be considered as ‘public shareholding’.
These clarifications are part of the responses by the Department of Investment and Public Asset Management (DIPAM), under the finance ministry, to potential investors’ pre-EoI queries, the news agency PTI reported. CLICK HERE FOR FULL REPORT
The government had on October 7 invited bids for privatising IDBI Bank and said that it together with Life Insurance Corporation of India (LIC) will sell a total of 60.72 per cent stake in the financial institution. The last date for putting in Expression of Interest (EoI) or preliminary bids is December 16.
Meanwhile, in past six months, IDBI Bank has outperformed the market by surging 60 per cent, as compared to 14.5 per cent rise in the S&P BSE Sensex.
In July-September quarter (Q2FY23), IDBI Bank posted a 46 per cent year-on-year (YoY) growth in net profit at Rs 828 crore compared to Rs 567 crore in the same period last year. The bank’s net income grew 48 per cent YoY at Rs 2,738 crore. Asset quality improved in the quarter under review, while net advances posted a double-digit growth however deposits witnessed a gradual rise.
In September, the rating agency ICRA revised its outlook on the bank’s instruments to positive from stable and reaffirmed the ratings. The ratings were based on the standalone credit profile of the bank, given the stated intent of LIC and the Government of India (GoI) to sell down/divest their shareholding in the bank.
Despite the stated intention of the GoI and LIC to divest their ownership, the share of current and savings account (CASA) deposits and retail term deposits witnessed a steady growth, leading to an improved granularity in the deposit base. The bank’s ability to continuously maintain and grow the core deposit base upon the change in ownership may, however, remain a monitorable, ICRA had said in its rating rationale.
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