IDBI Bank Shares Surge 9% as Divestment Nears Key Milestone

On Aug 21, 2025, IDBI Bank shares rallied by up to 9% and closed at ₹98.10. The significant gain in IDBI Bank shares follows an update on the bank’s privatisation process. Arunish Chawla, Secretary at the Department of Investment and Public Asset Management (DIPAM), announced that qualified bidders have nearly completed their due diligence, marking significant progress toward the bank’s strategic sale.

Chawla confirmed that all necessary information has been provided to the interested parties, and the due diligence process is expected to conclude by September.

Government's Divestment of IDBI Bank

The proposed divestment of IDBI Bank, where the Government of India and Life Insurance Corporation (LIC) jointly hold more than 94% equity, is being closely watched as a critical test case for the Centre’s broader privatisation agenda. Currently, the government holds a 45.48% stake in the bank, while LIC owns 49.24%.

As part of the transaction, the government plans to offload 30.48% of its stake, with LIC selling 30.24%, resulting in a total equity dilution of 60.72%. This transfer will also involve handing over management control to the successful bidder.

Meanwhile, the government is also advancing preparatory steps for potential stake sales in select public sector banks and state-run insurance companies, including LIC, through the Offer for Sale (OFS) route.

IDBI Bank Q1FY26 Earnings Highlights

The company reported a robust financial performance, with net profit surging to ₹2,007 crore, marking a 17% year-on-year growth. Operating profit stood at ₹2,354 crore, reflecting a 13% increase YoY. Total business rose to ₹5,08,775 crore, up by 8%, driven by a 7% growth in total deposits to ₹2,96,868 crore and a 9% rise in net advances to ₹2,11,907 crore.

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Asset quality improved significantly, with Gross NPA declining to 2.93% (a reduction of 94 bps YoY) and Net NPA dropping to 0.21%. Return on Assets (ROA) improved to 2.01%, while the Provision Coverage Ratio (PCR) remained strong at 99.31%. The bank also reported a healthy CRAR of 25.39% and a CASA ratio of 44.65%.

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