IDBI Bank share price rallied 7 per cent in intraday trade on the Bombay Stock Exchange (BSE) on Tuesday after the lender sold its stake in asset management business to Muthoot Finance.
IDBI Bank sold its stake in IDBI Asset Management (IAML) & IDBI MF Trustee Company (IMTL) to Muthoot Finance, Moneycontrol reported.
Reacting to the news, IDBI Bank share price gained as much as 7 per cent to touch an intraday high of Rs 35.15 apiece after opening marginally higher at Rs 32.90 against previous close level of Rs 32.85.
On the National Stock Exchange (NSE), shares of IDBI Bank were trading 2.89 per cent higher at Rs 33.80. The stock touched an intraday high and low of Rs 35.20 and Rs 32.50, respectively.
In a similar trend, shares of Muthoot Finance rose as much as 1.85 per cent to hit a high of Rs 727.20 against Monday's closing price of Rs 713.95. At the time of reporting, the stock was trading 0.49 per cent lower at Rs 710.45.
As on March 31, 2019, IDBI Bank held 66.67 per cent stake in IDBI Asset Management and 33.33 per cent holding in IDBI Capital Markets and Securities.
The Life Insurance of Corporation-controlled bank, which has been under the prompt corrective action of the Reserve Bank for more than a year, reported a net loss of Rs 3,459 crore during second quarter September 30, 2019. Earlier this year, insurance behemoth LIC had acquired 51 per cent controlling stake in the bank.
On the asset front, the gross NPA ratio of the bank stood at 29.43, marginally lower than 31.78 reported in the year-ago period, while the net NPA ratio fell sharply to 5.97 from 17.30 in the year-ago period.
IDBI Bank, which has been burdened with bad loans, is planning to sell non-core assets, including equity stakes. The bank is also planning to exit its life insurance joint venture, IDBI Federal Life Insurance Co. Ltd, in which it owns a 48 per cent stake, while Federal Bank and Ageas hold 26 per cent each, as per Mint report.
Edited by Chitranjan Kumar