IDBI Shares Gain 9% In Trade Today As Sensex Falls 1%

Shares of IDBI Bank jumped sharply in trade on Monday. The stock has gained 9.13% on October 10 at 46.60 as BSE Sensex fell 433 points or 0.74%. The stock has jumped sharply soon after government invited expression of interest for stake sale in IDBI Bank.

The 52-week high of IDBI is Rs 65 apiece and 52-week low is Rs 30 apiece. The stock has fallen 29% from its 52-week high level. The bank has a market capitalisation of Rs 50,159 crore as of writing the report.

It is worth noting that government has made it compulsory for keen buyers of IDBI Bank to give details for security clearance from the Ministry of Home Affairs (MHA) in the first stage of the bidding process.

Till date, in all cases of CPSE privatisation, government would require details pertaining to security clearance of the bidders at the second stage of the bidding process. It implies that bidders qualifying in the first or the Expression of Interest (EoI) round, were required to obtain security clearance from the government while placing their financial bids, stated the PTI report.

Earlier, the Department of Investment and Public Asset Management (DIPAM), while inviting Expressions of Interest (EoI), stated that the potential investor must have a minimum net worth of Rs 22,500 crore, must report net profit in three out of the past five years to be eligible for bidding for IDBI Bank. Also, a maximum of four members would be allowed in a consortium. And, successful bidder would be required to mandatorily lock-in at least 40% of the equity capital for five years from the date of acquisition, according to a PTI report.

It further said the selection of the qualified interested parties and the amount of equity stake such entities would hold in IDBI Bank would be decided by the Reserve Bank and the bidder would have to clear the 'Fit and Proper' assessment done by the banking regulator.

It also barred large industrial/corporate houses or individuals from participating in the bidding process. It is important to mention that the last date for submission of bids or Expression of Interest (EoI) is December 16, added the PTI report.

As of now, Life Insurance Corporation (LIC) holds 529.41 crore shares representing 49.24% stake in IDBI Bank, while the government holds 488.99 crore shares or 45.48% stake.

Of this, the government will sell 30.48% and LIC will sell 30.24% stake, aggregating to 60.72% of the equity share capital of IDBI Bank.