Mumbai, March 16 Shares of IDBI Bank plunged almost 16 per cent in early trade on Monday after the Centre cancelled the disinvestment process for the lender.
At around 10.30 a.m., the banking stock traded at Rs 77.56 apiece on the National Stock Exchange of India (NSE), down 15.86 per cent from its previous close of Rs 92.18, hitting an intraday low of Rs 77.40.
The government called off the disinvestment process after the bids received did not meet expectations. The two bids submitted by Fairfax Financial Holdings and Emirates NBD were reportedly below the reserve price.
The Centre had earlier invited financial bids for the disinvestment of IDBI Bank and was expected to announce the winning bidder by the end of March, though the final closure of the transaction could extend beyond the current financial year.
Under the proposed plan, the government aimed to divest a 30.48 per cent stake in the lender, valued at around Rs 36,000 crore at current market prices.
In addition, Life Insurance Corporation of India (LIC) planned to sell a 30.24 per cent stake, taking the total stake on offer to 60.72 per cent, with an estimated combined valuation of nearly Rs 72,000 crore.
Earlier, a report by NDTV Profit had indicated delays in the stake sale due to the impact of the Iran–Israel conflict on the broader disinvestment pipeline. However, people familiar with the development said the government may still proceed with the stake sale cautiously at a later stage.
The disinvestment process had begun on January 7, 2023, after the Department of Investment and Public Asset Management (DIPAM) received multiple expressions of interest from potential bidders.
As of March 16, both the government and LIC hold a 94.71 per cent stake in IDBI Bank.
The government owns 45.48 per cent, while LIC holds 49.24 per cent in the lender.
Disclaimer: This post has been auto-published from an agency feed without any modifications to the text and has not been reviewed by an editor