IDBI Bank Surges 19% on Divestment Hopes, June 17

IDBI Bank shares jumped 17.12% to Rs 90.36 on June 17 after large block deals and government confirmation that the strategic divestment remains on track for completion in FY27. About 10.64 million shares traded at prices between Rs 82 and Rs 92, with total volumes reaching 207 million shares by mid-session, 28 times Tuesday’s level. The rally marks the fourth consecutive day of gains, bringing the stock’s four-day cumulative rise to approximately 27%.

Block Deals Trigger Heavy Trading

Large block deals drove extraordinary trading volumes on the National Stock Exchange. About 10.64 million shares changed hands through multiple transactions at prices ranging from Rs 82 to Rs 92, representing a 6-19% premium over the previous close of Rs 77.15. By 2:21 pm, total NSE volume reached 207 million shares, far exceeding the stock’s three-month average daily volume of 13 million shares. The stock climbed to an intraday high of Rs 92.25, its highest level in nearly three months.

Government Confirms Divestment Timeline

A senior government official told Moneycontrol that the IDBI divestment remains on track for completion during FY27. The Centre and Life Insurance Corporation of India (LIC) jointly plan to sell a 60.72% stake, with the government selling 30.48% and LIC offloading 30.24%. Together, the two shareholders currently hold approximately 95% of the lender. Officials noted that fresh valuation is underway and will take about one month to complete before a final decision is made.

Broader PSU Divestment Wave Fuels Sentiment

The rally reflects renewed optimism tied to the government’s ambitious Rs 80,000 crore disinvestment target for FY27. Recent back-to-back offer-for-sale transactions across state-run companies have reignited speculation about IDBI Bank’s divestment. The government raised Rs 13,389.42 crore through four recent OFS transactions: NLC India (Rs 1,223.57 crore), NHPC (Rs 4,357.36 crore), Coal India (Rs 5,542.36 crore), and Central Bank of India (Rs 2,266.13 crore). IDBI Bank is one of the most closely tracked strategic-sale candidates given the scale of promoter holdings.

Valuation Challenges Remain

Previous bids from Fairfax Financial Holdings and Emirates NBD fell below the government’s undisclosed reserve price in February 2026, stalling the formal process. Officials acknowledged difficult market conditions for the transaction. The government is evaluating various aspects including a possible review of the reserve price. Despite these hurdles, the renewed government commitment signals progress toward completing one of India’s longest-running privatisation sagas.

Final Thoughts

IDBI Bank’s 19% surge reflects renewed divestment hopes rather than company-specific news. With government officials confirming FY27 completion and the stock up 31% in one month, investors are pricing in privatisation optimism, though valuation gaps and regulatory hurdles remain.

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