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IDBI Bank shares rose sharply on January 2, 2026, reaching Rs. 115.1 per share, the highest since June 2014. The stock closed with an 11% profit, supported by strong volumes and renewed focus on India’s largest proposed banking privatization.
Trading activity increased during the session. Volumes rose to nearly 4 times the 20-day average, showing rising investor participation. Market data showed close to 15 million shares traded, highlighting strong short-term interest as the divestment timeline advanced.
The rally followed reports that the government may invite financial bids between January 15 and January 20. Officials aim to announce a preferred bidder by March 2026, though regulatory approvals may extend the process. The transaction, valued at nearly $7.1 billion, would mark India’s first major bank privatization in over two decades.
The Centre and Life Insurance Corporation of India jointly hold 94.71% of IDBI Bank. Under the plan, both entities intend to sell a combined 60.72% stake to a strategic investor. The government plans to divest 30.48%, while LIC will sell 30.24%, along with management control.
Several bidders have received “fit and proper” clearance from the Reserve Bank of India. These include Kotak Mahindra Bank, Fairfax Financial Holdings, and Emirates NBD. Sources say all shortlisted bidders are still carrying out due diligence ahead of the final bidding stage.
Kotak Mahindra Bank is widely seen as a front-runner, though market watchers believe it may stay cautious on pricing. The divestment is a key part of the government’s plan to cut state ownership in banks and improve capital efficiency.
IDBI Bank’s operational turnaround has strengthened its appeal among investors and bidders. The lender reported a 39% year-on-year increase in net profit to Rs. 1,836 crore for the second quarter of FY25. Improved margins and controlled costs supported earnings growth.
Net interest income rose 26% year-on-year to Rs. 3,875 crore during the quarter. Net interest margins expanded to 4.87%, up from 4.33% a year earlier. Asset quality metrics also improved, with net non-performing assets declining to 0.21% by June 2025.
The bank’s balance sheet recovery followed years of stress linked to high bad loans. Improved profitability and lower credit risk have repositioned IDBI Bank as a viable privatization candidate rather than a distressed sale.
On January 2, the stock also ranked among the most actively traded counters. Data showed over 2.27 crore shares exchanged, with a traded value exceeding Rs. 240 crore. The share price was above all major moving averages, showing strong momentum.
Although delivery volumes dipped compared with recent averages, consecutive gains over several sessions suggest sustained market engagement. Analysts continue to track volume patterns for confirmation of longer-term accumulation.
The IDBI Bank divestment remains a key event for India’s banking sector. Market participants now await formal bid invitations and further clarity on timelines.
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