IDBI Bank shares slide after report on stake sale setback

Shares of IDBI Bank witnessed a sharp decline in Monday’s trade after reports indicated that the government may cancel the current round of bids for selling a majority stake in the lender. The development triggered heavy selling in the stock, which fell more than 13 per cent during the session.

The Centre and Life Insurance Corporation together hold over 94 per cent stake in the bank and have been attempting to privatise the lender as part of the government’s broader disinvestment programme. The proposed sale involves transferring a controlling stake along with management control to a strategic buyer.

According to market reports, the government is reviewing the bids received for the transaction and may consider scrapping the current process if the valuations offered are not satisfactory. A fresh attempt to sell the stake could be initiated at a later stage.

The uncertainty around the privatisation process weighed on investor sentiment, leading to a sharp correction in the stock. Market participants said that clarity on the government’s approach to the stake sale will be crucial for the bank’s near term outlook in the equity market.