Share of IDBI Bank jumped over 14 per cent in early trade on the Bombay Stock Exchange after the Cabinet Committee on Economic Affairs gave its in-principle approval for strategic disinvestment along with transfer of management control in IDBI Bank Ltd.
At 12:51 hours, IDBI Bank share was quoting at Rs 40.60, up 6.98 per cent on the BSE. The stock hit an intraday high of Rs 43.50 and an intraday low of Rs 40.15 so far.
LIC's Board has also passed a resolution to the effect that LIC may reduce its shareholding in IDBI Bank Ltd. through divesting its stake along with strategic stake sale envisaged by the Govt. with an intent to relinquish management control and by taking into consideration price, market outlook, statutory stipulation and interest of policyholders.
The extent of respective shareholding to be divested by the Government of India (GoI) and LIC shall be decided at the time of structuring of transaction in consultation with RBI.
GoI and LIC together own 94.72% of the equity of IDBI Bank (GoI 45.48%, LIC 49.24%). LIC is currently the promoter of IDBI Bank with Management Control and GoI is the co-promoter.
Shares of IDBI Bank rose nearly 5 per cent on Tuesday after the private sector lender turned profitable after five years in last fiscal. The bank reported a net profit of Rs 1,359 crore for FY21 compared to a loss of Rs 12,887 crore in FY20.
The lender further said that it plans to maintain the Net NPA level below 3 per cent till March 2022 and 2.5 per cent thereafter. It also aims to improve NII with credit growth driven from lending to the mid-corporate and MSME sector with its continued focus on the retail segment mainly the housing loan segment.