Shares of IDBI Bank hit a 52-week high of Rs 55.60 in heavy intraday trading on Tuesday, up 5% on the BSE. The private bank’s share price broke the previous high of Rs 54.75 on December 10, 2021. The stock was higher for the fourth straight session, surging 15%.

Shares of IDBI Bank were up 3.4% at Rs 54.95 at 12:18 pm, while the S&P BSE Sensex gained 0.55%. Over-the-counter trading volumes on the NSE and BSE jumped 1.5 times, with 38.18 million shares changing hands.

Over the past two sessions, shares of IDBI Bank have risen 9% after the finance ministry said on Sunday that IDBI Bank would continue to operate as an “Indian private sector bank” following a strategic sale and the government’s remaining 15%. After privatisation, the lender’s percentage stake will be considered ‘public shareholding’.

The clarifications are part of the Department of Investment and Public Asset Management (DIPAM), under the Ministry of Finance, to respond to inquiries from potential investors ahead of the EoI, news agency PTI reported.
The government had invited IDBI Bank to privatise on October 7, saying it would sell a 60.72% stake in the financial institution along with the Life Insurance Corporation of India (LIC). The last date to submit an Expression of Interest (EoI) or initial bid is December 16.

Meanwhile, IDBI Bank has outperformed the market over the past six months, rising 60%, compared with a 14.5% gain for the S&P BSE Sensex.

In the July-September quarter (Q2FY23), IDBI Bank’s net profit rose 46% year-on-year to Rs 828 crore compared to Rs 567 crore a year earlier. The bank’s net income rose 48% year-on-year to Rs 2,738 crore. Asset quality improved in the quarter with double-digit growth in net lending, but deposits rose gradually.

In September, the rating agency ICRA revised its outlook on the bank’s instruments to positive from stable and reiterated the rating. Ratings are based on the bank’s standalone credit profile, as LIC and the Government of India (GoI) have indicated their intention to sell/divest their stakes in the bank.

The share of current and savings account (CASA) deposits and retail term deposits has grown steadily, resulting in improved granularity in the deposit base, despite the GoI and LIC’s stated intention to divest their ownership. However, ICRA said in its rating rationale that the bank’s ability to sustain and grow its core deposit base on a sustained basis following the ownership change might be monitored.