IDBI Bank Soars 18% As Govt Pushes Ahead With Privatisation Plan

Shares of state-owned IDBI Bank surged more than 18% on Wednesday after reports indicated that the government's long-pending strategic divestment of the lender remains on track and could be completed during FY27.

The stock climbed as much as 19% to an intraday high of ₹91.88 on the NSE before trading at ₹91.16, up 18.16%, in afternoon trade. The rally marked the fourth consecutive day of gains for the stock, taking its cumulative rise to nearly 27% over the period.

Investor sentiment received a boost after government sources indicated that the strategic sale process was progressing despite delays and that authorities remained committed to completing the transaction.

Govt, LIC Selling Stake

The Centre and Life Insurance Corporation of India (LIC) are jointly seeking to divest a 60.72% stake in IDBI Bank along with management control.

Under the proposed transaction, the government plans to sell 30.48%, while LIC will offload 30.24%. Together, the two shareholders currently own nearly 95% of the Mumbai-based lender.

The divestment programme remains one of the government's most significant strategic sale initiatives. Finance Minister Nirmala Sitharaman had reiterated in April that the government remains committed to the transaction, while shortlisted bidders are continuing with the due diligence process, according to a recent parliamentary reply by the Minister of State for Finance.

Privatisation Expectations Drive Re-Rating

Market participants believe a successful strategic sale could unlock value by bringing in a private sector owner with management control and fresh growth opportunities.

The privatisation process has been closely tracked by investors for several years, with periodic delays weighing on sentiment. Fresh indications that the transaction remains on schedule for completion in FY27 have renewed optimism around the stock.

The rally also reflects expectations that a change in ownership could improve operational efficiency, strengthen governance and support future growth prospects.

Improving Fundamentals Support Sentiment

Apart from divestment-related developments, IDBI Bank's improving financial performance has also aided investor confidence.

The lender has staged a turnaround over the past few years after significantly reducing its stock of bad loans and strengthening its balance sheet through multiple rounds of capital support.

For the quarter ended March 2026, IDBI Bank reported a net profit of ₹1,943.2 crore, compared with ₹2,051.2 crore in the year-ago period. Net interest income rose 17% year-on-year to ₹3,851.5 crore.

The improvement in asset quality and profitability has helped position the bank more favourably as the government moves ahead with its privatisation plans, making the progress of the strategic sale a key trigger for investors.