Shares of IDBI Bank Ltd surged more than 9% to a four-month high of Rs 43.85 on the BSE after Bloomberg reported that the government was considering selling a 51% stake in the bank.

The stock was trading at Rs 43.50 at 10.3am, up 8.3% from its previous close. The stock has risen 46% since early June and is down 8% this year.

Shares of other mid-sized public sector banks were also higher in hopes of going private. The government said it would spin off IDBI Bank and privatise two public sector banks in its budget.

Union Bank of India rose 5%, Central Bank of India 2%, Bank of India 3.4%, UCO Bank 2.6%, Indian Bank 2.5%, Punjab National Bank 2.4%, Indian Overseas Bank 2%, State Bank of India and Bank of Baroda rose respectively 1%.

LIC and the government jointly hold more than 98% of IDBI Bank. LIC acquired a 51% stake in IDBI Bank in 2019 for Rs 21,624 crore at an average price of Rs 61 per share. Bloomberg reported that the government and LIC will formally seek to assess buyer interest as early as September.