Why IDBI Bank shares crashed 15% today

Why IDBI Bank shares crashed 15% today

Shares of IDBI Bank witnessed a massive crash of nearly 15% on Monday.

The fall came after reports emerged that the Indian government is considering halting the sale process for its majority stake in the bank.

The financial bids received were lower than the floor price set by the government, according to The Economic Times.

Government, LIC planned to offload over 30% stake each

In May 2021, the Cabinet Committee on Economic Affairs, led by Prime Minister Narendra Modi, had given its in-principle approval for strategic disinvestment and transfer of management control in IDBI Bank.

In 2023, the government and Life Insurance Corporation (LIC) had planned to offload a little over 30% each in the bank.

Currently, the government owns a 45.48% stake while LIC holds a 49.24% stake in IDBI Bank.

Potential buyers would have another chance to submit bids

If the government decides to go ahead with the sale, it might have to restart the bidding process.

This means that potential buyers would have another chance to submit their bids for a stake in IDBI Bank.

The move comes as part of a broader strategy by the government to divest its stakes in state-owned banks and financial institutions.

IDBI Bank shares near 52-week low

IDBI Bank's shares fell by 15% to ₹78.42 per share on the NSE, nearing their 52-week low of ₹71.90 per share hit in March last year.

The fall marks its biggest single-day decline since June 2024.

An outright cancellation of the strategic sale could hinder the government's ability to meet its FY27 disinvestment target of ₹80,000 crore through stake sales and asset monetization.