IDBI Bank has been up for privatisation for several years, and the govt had been awaiting an RBI’s assessment on bidders meeting the “fit and proper” norms — or are compliant with regulations and are not under the scanner of other regulators — to move to the next stage of the process.
The central bank has given its report on all but one bidder which happens to be a foreign participant, which did not share information and the overseas regulator too has not provided data, ToI on Thursday reported. With the current market cap nearing Rs 95,000 crore, the Centre could potentially realize around Rs 29,000 crore from the disinvestment. However, several observers have noted that the transaction terms are not very attractive.
The government and Life Insurance Corporation (LIC) collectively own 94.72% of IDBI Bank, with LIC holding a 49.24% stake and the government holding 45.48%. Public shareholders account for the remaining 5.28%.
Centre wants to sell a 60.7% stake in the bank, comprising 30.5% of its own and LIC’s 30.2%.Market observers view IDBI Bank as a more straightforward divestment candidate since it operates as a private lender, with government stakes increasing due to substantial capital infusion to manage bad debt-driven losses.At 11:11 am, the scrip was trading 5.6% higher at Rs 92.9 on BSE. On a year-to-date basis, the stock has surged 37%, while it has rallied 155% in the past two years.In technical terms, the relative strength index (RSI) of the stock is currently at 55.7. An RSI below 30 is considered oversold, and above 70 is overbought, Trendlyne data showed. The stock is trading higher than the 5-day, 10-day, 20-day, 30-day, 50-day 100-day, 150-day, and 200-day simple moving averages (SMAs).
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