IDBI Bank rallies 3% as govt looks to cut its holding to 52%

NEW DELHI: Shares of IDBI Bank rallied 3 per cent on Friday amid reports that the government was looking to revive IDBI Bank’s disinvestment plan and has instructed the lender's management to bring its stake down to 52 per cent.

“The bank has enquired how much government stake can fall,” said a senior government official who did not want to be named told ET. “We have apprised them that the government holding can go down to 52 per cent.”

Following the report, the stock jumped nearly 5 per cent to hit an intraday high of Rs 73.35 on BSE. It eventually settled at Rs 72, up 3 per cent.

As of June 30, the government’s stake in the lender stood at 73.98 per cent. The bank has not announced any capital support to the bank for the ongoing financial year.

IDBI Bank already has shareholder approval to raise Rs 8,000 crore of capital, Managing Director Kishor Kharat told ET.

The government is said to have told the bank to choose any route to raise money, including strategic sale, and it is already looking for merchant bankers to manage a qualified institutional placement ( QIP).