Shares of tumbled sharply in today’s trade, crashing 16 per cent on reports that the government will shelve the bids it received for a majority stake sale as the offers received were below the government’s minimum price expectation.
The stock hit an intraday low of ₹77.56 on the compared with the previous close of ₹92.18, after reports suggested that the government’s long-pending strategic stake sale in the lender may be called off.
According to reports, the government’s plan to divest its majority holding in the bank is likely to be scrapped as both financial bids received for the transaction were below the reserve price. Sources indicated that the bids failed to meet valuation expectations set by the inter-ministerial group overseeing the disinvestment process.
IDBI Bank stock movement today on the NSE
The government, along with Life Insurance Corporation of India, had been pursuing the sale of a combined 60.72 per cent stake in the bank and had invited Expressions of Interest in October 2022. Financial bids for the strategic sale were submitted on February 6 and subsequently opened for evaluation.
Reports suggest that the bids were lower than the reserve price approved by the core group on disinvestment, chaired by the Cabinet Secretary, reducing the likelihood of the transaction moving forward.
Among the entities reported to have submitted bids
The potential collapse of the stake sale has created uncertainty among investors, triggering heavy selling pressure in the counter and weighing significantly on the bank’s market performance.