IDBI Bank shares surged nearly 19% on Wednesday, extending their gains to about 27% over the last four trading sessions, as investors rushed into the stock amid renewed hopes around the lender’s long-pending privatisation and heavy trading activity.
The stock climbed as high as Rs 91.88 on the NSE during the session, even though it remains down around 13% so far in 2026.
So what exactly is driving the sudden rally?
The biggest trigger appears to be fresh reports that the Centre is exploring ways to revive the stalled privatisation of IDBI Bank.
Last month, The Economic Times reported that the government is examining options to move forward with the sale process, including whether bids submitted by Prem Watsa-led Fairfax Financial Holdings and Emirates NBD could still be considered despite reportedly falling short of the reserve price.
According to the report, the bids remain “alive” and the government is studying legal provisions that could allow offers below the reserve price to be accepted.
A senior government official quoted in the report said the IDBI Bank stake sale was never “scrapped”, even after financial bids came in below expectations.
For investors, any sign that the privatisation process is moving forward is seen as a positive development.
The rally was accompanied by unusually high trading activity.
Nearly 20.81 crore shares worth more than Rs 1,825 crore changed hands during the session. ET Now also reported that around 82 lakh shares were traded through six block deals.
While the identities of the buyers and sellers could not be independently verified, such large transactions often attract market attention and can trigger additional buying interest.
Another factor supporting sentiment is the perception that the government remains committed to completing the transaction.
According to the report, a decision on the next steps could be taken soon as the Centre looks for ways to boost non-tax revenues.
Investors appear to be betting that the government will find a way to move the process ahead rather than abandon one of India’s most closely watched banking privatisation plans.
Apart from the stake-sale story, IDBI Bank’s recent financial performance has shown some positive signs.
For the March quarter, the bank reported a net profit of Rs 1,943.2 crore, down 5.3% year-on-year. However, net interest income rose 17% to Rs 3,851.5 crore from Rs 3,290 crore a year earlier.
Asset quality also improved further. Gross non-performing assets (GNPA) fell to 2.32% from 2.57% in the previous quarter, while net NPAs narrowed to 0.15% from 0.18%.
The next major trigger for the stock is likely to come from any official update on the privatisation process.
Under the sale process, the successful bidder will still need clearance from the Reserve Bank of India, approval from regulators including the Competition Commission of India, and would also be required to make an open offer to minority shareholders.
For now, investors seem to be focusing on one thing: the possibility that IDBI Bank’s long-running privatisation story may finally be moving again.
(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)