The news of the disinvestment process likely stalling dealt a fresh blow to investors, with the stock already down 17% over the past month going into Monday’s session. They hurried to offload IDBI Bank’s shares soon after the market opened and over 12.5 crore shares traded on the exchange during the session, the NSE data revealed.
Citing a source, the report further said if the government still intends to pursue the strategic sale, it will have to start the bidding process afresh, which will take time.
Also read: IDBI Bank sale may stall as bids trail reserve price
Meanwhile, IDBI Bank issued a statement, clarifying that the proposed divestment is a confidential process being undertaken by the Government of India (GOI) and the lender is not in a position to either confirm or deny media reports.
The government’s equity in IDBI Bank as of December 31, 2025 stood at 45.48% while state-run Life Insurance Corporation of India (LIC) held 49.24% as on this date. Together, they held a 94.71% stake and aim to offload a 60.72% stake—30.48% by the government and 30.24% by LIC.Kranthi Bathini, Director-Equity Strategy at WealthMills Securities said that the news was a big sentiment dampener for investors who have been waiting a long time to get the process through. “It has really tested their patience, failing to meet the set timelines,” he said. Moreover, the overall weak market sentiments and selling pressure in bank stocks have dented investors’ confidence, he added.Nifty Bank is down 11% in a month, with stocks falling as much as 25% in this period.
IDBI Bank disinvestment timeline
The proposed strategic disinvestment is being undertaken through a competitive bidding process and not through negotiations, keeping the lender out of the process, the company filing said.
On May 5, 2021, IDBI Bank received an in-principle approval from the Cabinet Committee on Economic Affairs (CCEA) for its strategic disinvestment along with the transfer of management control in IDBI Bank.
The government appointed KPMG India as the transaction advisor and Link legal as the legal advisors on October 7, 2022 for providing advisory services and managing the transaction.
Market regulator Securities and Exchange Board of India (Sebi) approved the reclassification of GOI as public shareholder upon completion of the sale on January 5, 2023. It later allowed the reclassification of LIC as a public shareholder upon completion of the sale.
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What should investors do?
Shares of IDBI Bank are trading below their 50-day and 200-day simple moving averages of Rs 105 and Rs 98, respectively, according to Trendlyne data.
Experts hold a divergent view on what to do with the stock.
Sunny Agrawal, Head – Retail Fundamental Desk at SBI Securities advised investors to buy on dips, expecting the price to stabilise around the Rs 65-70 band (at FY26E 1.0x – 1.1x PBV multiple).
Bathini of WealthMills said that the fundamentals of the lender remain intact, notwithstanding the correction. He recommends investors hold the counter while saying no to fresh additions.
Lender’s December quarter standalone net profit stood at Rs 1,935 crore compared to Rs 1,908 crore reported in the year-ago period, rising by 1.4% year-on-year. However, the profit after tax was down 47% on a sequential basis compared to Rs 3,627 crore in Q2 of FY26.
The lender earned an interest income of Rs 7,074 crore in the quarter under review, which was down 9% versus Rs 7,816 crore in the year-ago period. It was marginally down by 0.4% versus Rs 7,104 crore in Q2FY26.
Decoding the charts, Nilesh Jain, Vice President – Head of Technical and Derivative Research at Centrum Finverse said he sees weakness, going forward. His suggestion to investors is to ‘Sell’ on rise.
(Disclaimer: The recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times.)
