Shares of IDBI Bank crossed the ₹100 mark for the first time in 10 years during today’s intraday session, gaining 7%. This follows the previous session during which the stock surged by 13%. This recent rally has pushed the stock to gain 51% in the current year so far.
The stock last reached the ₹100 mark in July 2014. It fell to an all-time low of ₹18 in April 2020. However, the stock began its upward trajectory in June 2022 and has since seen a remarkable gain of 226%.
Media reports indicate that the Reserve Bank of India’s (RBI) vetting process to identify potential bidders for the bank is nearing completion. Tuhin Kanta Pandey, Secretary of the Department of Investment and Public Asset Management (DIPAM), shared this significant update with Moneycontrol, indicating that the privatization efforts are progressing smoothly.
The bank has been slated for privatization for several years. In October 2022, the government invited Expressions of Interest (EoIs) for IDBI Bank, offering to sell a combined 60.72% stake, with 30.48% from the government and 30.24% from LIC, along with transferring management control.
Post-sale, the government and LIC will collectively retain a 34% residual stake in the bank.
Recently, the Reserve Bank of India issued a ‘fit and proper’ report on potential bidders, moving the divestment process forward. This evaluation by the RBI ensures that the bidders meet the necessary criteria to comply with regulations, enabling the privatization process to advance to the next stage, according to media reports.
To qualify, bidders for IDBI Bank must have a minimum net worth of ₹22,500 crore and have reported net profits in three of the last five years.
On the other hand, the bank reported a healthy set of numbers for the June quarter (Q1FY25), with a 40% YoY jump in its standalone net profit to ₹1,719 crore.
In the same period last year, the bank reported a net profit of ₹1,224 crore. Seeing sequentially, the net profit improved by 5.50% as the bank in Q4FY24 recorded a net profit of ₹1,628 crore.
The bank’s net interest income during the reporting quarter dropped to ₹3,233 from ₹3,998 crore. The net interest margin of the bank came in at 4.18% in Q1, a drop from 5.80% in Q1 FY24.
In Q1-2025, the return on assets (ROA) increased by 34 basis points to 1.83%, compared to 1.49% in Q12024. The cost of deposits rose to 4.58% in Q12025, up from 4.12% in the same quarter of the previous year. Similarly, the cost of funds increased to 4.81% in Q12025, compared to 4.40% in Q12024.
On the asset quality front, the gross non-performing assets (NPA) ratio improved to 3.87% as of June 30, 2024, down from 5.05% a year earlier. The net NPA ratio also showed improvement, decreasing to 0.23% as of June 30, 2024, from 0.44% on June 30, 2023.
Additionally, the provision coverage ratio, including technical write-offs, rose to 99.34% as of June 30, 2024, up from 98.99% a year prior, according to the bank’s earnings filing.
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