IDBI Bank shares fell over 4 per cent to the day’s low of Rs 59.50 on the NSE on Wednesday after the government cancelled the bid invitation process to appoint an asset valuer for the lender’s divestment.
The Centre will call for a fresh request for proposal (RFP) for appointing the asset valuer. This cancellation comes after the government extended the RFP four times.
This January, the government received multiple preliminary bids for the strategic sale.
In this strategic divestment initiative, the asset valuer would be responsible for conducting a thorough evaluation of multiple facets of IDBI Bank. This entails determining the fair value of the bank’s investments, loans, and advances, with the aim of presenting a comprehensive overview of its financial portfolio.
The valuation process would include a scrutiny of IDBI Bank’s deposits, borrowings, and other liabilities to attain a comprehensive insight into the financial position of the institution.
Through the appointment of an asset valuer to evaluate the bank’s financial well-being, the government seeks to promote transparency and fairness in the valuation proceedings.
Last week, DIPAM Secretary Tuhin Kanta Pandey said the IDBI Bank strategic sale transaction was “on course” but the transaction would not be completed in the current financial year.
The government is looking to offload its 30.48 per cent stake in IDBI Bank, while the Life Insurance Corporation of India (LIC) of India will sell a 30.24 per cent shareholding. Presently, the Indian government and LIC collectively own about 95 per cent of IDBI Bank.
The IDBI Bank shares have given returns of over 22 per cent in the past 12 months while its year-to-date gains have been around 10 per cent which is higher than the returns given by Nifty during both time frames.
The stock is currently trading above its 200-day simple moving average (SMA) while below its 50-day SMA according to Trendlyne data.
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