IDBI Bank Shares Jump Most In Nearly Two Months On Cabinet’s Privatisation Nod
Shares of IDBI Bank Ltd. gained the most in nearly two months after a plan to privatise the struggling lender was approved.
The government plans to sell all or part of its 45.5% stake in the lender as well as state-owned Life Insurance Corporation of India’s 49.2% ownership, according to a government statement on Wednesday. The sale envisages ceding management control.
The strategic buyer is expected to infuse funds and generate more business “without any dependence on LIC and government assistance” the statement said.
The Cabinet Committee on Economic Affairs has approved the strategic divestment of IDBI Bank, along with a transfer of management control.
IDBI Bank shares rose as much as 14.6%—the most since March 12—to Rs 43.50 apiece. The stock, best-performing among peers, however, pared some of the gains. Trading volume was 10 times the 20-day average as of 11:30 a.m. on Thursday.
The shares have gained 19% in the past five days and have risen 11% in the past 30 days.
Analysts have one ‘buy’ and no ‘hold’ or ‘sell’ recommendations on the stock.
The price target of Rs 54.60 represents a 30% increase from the last price.