IDBI shares tank 17% after govt shelves sale

MUMBAI: Shares of IDBI Bank fell as much as 16.5% on Monday to Rs 77. The decline wiped out over Rs 16,000 crore in market capitalisation after reports said govt may shelve bids for a majority stake in the lender because offers were below its minimum price expectations. Govt has been attempting to sell its stake in the lender for four years as part of a broader privatisation push involving staterun firms.

The proposed transaction included a 30.5% stake held by govt and a 30.2% stake held by Life Insurance Corporation of India, which had rescued the bank in 2018 when it was weighed down by bad loans. The govt had planned to complete the stake sale by the end of this month.

In an exchange filing, IDBI Bank said it had received no communication from the govt regarding the disinvestment process. The lender said the exercise is handled by the Department of Investment and Public Asset Management and does not involve the bank directly.
After Kotak Mahindra Bank said it was not in the race to acquire the lender, only foreign investors were seen as potential buyers.

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