IDBI Bank share price: Why this stock is down 5%, a day after soaring 17%

IDBI Bank Ltd fell over 5 per cent in Thursday's trade on profit booking, a day after the stock rallied 17 per cent on heavy turnover, as the lender issued a clarification over the recent price movement, saying there is no undisclosed or price sensitive information or any impending announcement, which needs to be informed to the exchange at this point of time. The development dashed hopes that are built around the government's strategic stake sale in the bank, a bit.  

IDBI Bank Ltd fell 5.35 per cent to Rs 85.63 per share on BSE, trimming its one-week rise to 18 per cent. The bank said the process of strategic disinvestment of the bank is being handled by DIPAM, and in this regard, the bank has made disclosures to the stock exchanges informing the developments from time to time. 

"We also assure you that bank shall continue to promptly inform the exchanges all material events, information or actions as required under LODR Regulations," IDBI Bank said.
 
Hopes were high that the government may soon come up with a strategic sale plan for the lender, especially after back-to-back offer for sales (OFSes) announced recently. The IDBI Bank stock broke above its 200-DMA on strong volumes in the previous day and posted highest volumes since October 2021.

Reports earlier that the government was open to seeking fresh financial bids for the strategic disinvestment of IDBI Bank. It was also seeking revised financial bids from the two entities that had already bid for the stake, reports suggested. Fairfax Financial Holdings Ltd and Emirates NBD were the two likely bidders for the IDBI Bank privatisation, but the bids came in at a price well below the reserve price. 

IDBI Bank was rescued by LIC in 2019, following a surge in bad loans, making its eventual privatisation a key test case for broader banking sector reforms. The government holds a 45.48 per cent stake in the bank, along with Life Insurance Corporation of India, which owned 49.24 per cent. The plan is to jointly divest a majority 60.7 per cent stake, reports suggested.

The government has set an ambitious disinvestment and asset monetisation target of Rs 80,000 crore for the ongoing financial year. This is against the actual divestment receipts of Rs 16,885.56 crore and asset monetisation of Rs 28,420.49 crore in FY26, as per DIPAM. 

The government's sharp focus on meeting its FY27 target is visible following five back-to-back OFSes including the ongoing General Insurance Corporation of India issue. A total of Rs 13,389.42 crore has been raised via four OFSes recently. They included a 2.73 per cent stake sale in NLC India for Rs 1,223.57 crore, 6.01 per cent stake sale in NHPC for Rs 4,357.36 crore, 2 per cent stake sale in Coal India for Rs 5,542.36 crore and 8.08 per cent stake sale in Central Bank of India for Rs 2,266.13 crore. Post the recent divestments, government held 61-81 per cent stake in the PSUs.