What's driving IDBI Bank shares higher? Stock zooms 36% in 4 weeks

Business Standard

05-06-2025

IDBI Bank share price today
IDBI Bank shares gained 4 per cent today to hit a high of ₹104.40 on the BSE in Thursday's intraday trade amid heavy volumes.
In the past two trading days, the stock price of the private sector lender has rallied 6 per cent. Further, in the past four weeks, it has zoomed 36 per cent. Currently, IDBI Bank is trading close to its 52-week high level of ₹107.98, which it had touched on July 29, 2024. It has bounced back 58 per cent from its March 2025 low of ₹66.14 on the BSE.
At 09:59 AM, IDBI Bank share price was quoting 2 per cent higher at ₹102.45, as compared to 0.52 per cent rise in the BSE Sensex. The counter saw huge trading volumes today with 14.57 million shares, cumulatively, changing hands in the first 45 minutes of trading on the NSE and BSE.
What's driving IDBI Bank stock price higher?
The government has been working on the privatisation of IDBI Bank for over two and a half years. On October 07, 2022, the Department of Investment and Public Asset Management (DIPAM) released a Preliminary Information Memorandum and invited expression of interest (EOI) from interested parties for a stake sale of up to 60.72 per cent in IDBI Bank, including the stake of the Government of India (GoI) (30.24 per cent) as well as Life Insurance Corporation of India (LIC) (30.48 per cent).
Even as the process to dilute their respective stakes in IDBI has progressed, the conclusion and eventual finalisation of new stakeholders is still awaited.
According to a PTI report, DIPAM Secretary Arunish Chawla, in April, said the government has appointed asset valuers for valuation of IDBI Bank and is also deliberating the share purchase agreement to be signed with a prospective buyer.
Meanwhile, according to a Reuters report, the Indian banking regulator is signalling possible rule changes ahead that would let foreigners own more of India's banks, spurred by overseas institutions' eagerness for acquisitions and the fast-growing economy's need for more long-term capita.
IDBI Bank results
For the January to March 2025 quarter (Q4FY25), IDBI Bank reported a 26 per cent year-on-year (Y-o-Y) increase in net profit at ₹2,051 crore, compared to ₹1,628 crore in Q4FY24. However, Net Interest Income (NII) declined by 11 per cent Y-o-Y to ₹3,290 crore from ₹3,688 crore last year.
The bank showed improvements in asset quality with Gross Non-Performing Assets (GNPA) dropping to 2.98 per cent, down from 3.57 per cent in the December 2024 quarter (Q3FY25), while Net NPA declined to 0.15 per cent from 0.18 per cent.
Apart from the steady growth in advances and the consequent improvement in its core income and profit, IDBI Bank continues to benefit from the recoveries from significantly provisioned stressed assets. The operating profitability is supported by strong recoveries from written-off accounts while credit and other provisions also remained low, supporting the overall profitability. The bank has a significant pool of highly provisioned stressed assets, which is likely to support its core profitability.
"Though the capitalisation profile was supported by capital infusion in the past by LIC and the GoI, IDBI Bank has remained profitable since FY21. Notwithstanding the sufficient internal accruals and capital position for growth, the Reserve Bank of India's (RBI's) implementation of the expected credit loss (ECL) framework for credit exposures and additional provisioning on infrastructure financing remain monitorable," rating agency Icra said in January 2025.
However, the strong capital cushions provide support for such transition(s). Although the ratings are based on IDBI's stand alone credit profile, any change in its parentage will be monitorable, it added.
About IDBI Bank
IDBI Bank, founded in 1964, is a private sector bank headquartered in Mumbai. It was a public sector bank till February 2019 with the GoI holding a majority stake. In January 2019, LIC increased its stake in the bank to 51 per cent by infusing capital of ₹21,624 crore, resulting in the dilution of the GoI's ownership to 46.46 per cent as on January 24, 2019 from 85.96 per cent.
LIC maintained its holding at 51 per cent during the subsequent capital raise of ₹9,300 crore in September 2020, while the GoI's share remained at a similar level of 47.11 per cent. However, LIC and the GoI's stakes in the bank declined to 49.24 per cent and 45.48 per cent, respectively, after it raised capital via a qualified institutional placement (QIP) in FY2021. Given the decline in the GoI's majority shareholding, the Reserve Bank of India (RBI) classified IDBI as a private sector bank w.e.f. March 2019.