IDBI Bank rallied more than 16% on the back of Union finance minister Arun Jaitley’s comments in a television interview that the government was considering privatisation of the state-owned lender on the lines of Axis Bank.
The IDBI Bank scrip closed at Rs 69.45 on the BSE, up Rs 9.95, or 16.72%. More than 3.44 crore shares were traded on the BSE and NSE, seven times the 30-day average daily volume of 45.2 lakh and nearly nine times the three-month average volume of 39.15 lakh shares. The stock has hit a high of Rs 84.80 and low of Rs 52.45 per share in the past 52 weeks. IDBI Bank could be given operational freedom on the lines of Axis Bank, which runs as a corporate bank despite being promoted by government entities, the FM said in an interview to CNBC-TV18. The government currently holds 76.5% stake in the state-owned lender.
Unlike other PSUs, IDBI Bank came into existence through IDBI Act, 1964 (which was repealed in 2003). Hence, there is no obligation on the government to hold a minimum of 51% stake specified for the PSU banks under the Banking Regulation Act, the FM said. The present IDBI Bank is a combined entity of erstwhile long-term financial institution Industrial Development Bank of India and its private lending arm IDBI Bank. IDBI promoted IDBI Bank after the Reserve Bank of India granted the first batch of licences to private lenders in 1993.