The stock of IDBI Bank on Friday surged up to 8.5 percent on the bourses after comments from Union Finance Minister Nirmala Sitharaman over the lender’s divestment process. While the stock opened almost flat in the morning at Rs 73.70 compared to the previous close of Rs 73.69, it later climbed by up to 8.5 percent to reach Rs 79.98 apiece.The rally came after Sitharaman said at an event that the government will continue the disinvestment process of the bank despite some failed attempts in the past. An earlier attempt to sell the bank failed to generate the expected outcome. The government and Life Insurance Corporation of India, which together hold a majority stake in the lender, are now reassessing their strategy to ensure better value realisation from the transaction.
According to recent reports, the government has initiated a fresh valuation exercise to revive the long-pending sale of IDBI Bank.
The valuation process is currently underway and is expected to take about a month to complete.The Centre will take a call on whether to invite fresh bids for the stake sale after the revised valuation is finalised. The updated valuation will effectively serve as the benchmark for the next phase of the disinvestment process. In the earlier round of the strategic sale, potential bidders such as Fairfax India Holdings and Emirates NBD were reported to have submitted bids that fell short of the government’s internal valuation expectations.This time, the government is expected to adopt a more measured and calibrated approach to the transaction, avoiding the kind of speculative market activity that had earlier pushed up the stock price sharply.The Centre had first invited expressions of interest in 2022 to sell a 60.72 percent stake in IDBI Bank, including management control, making it one of the most significant banking sector privatisation efforts in recent years.