Last updated: Nov 22, 2023 12:54 IST
Shares of IDBI Bank fell over 4 percent to the day’s low of Rs 59.50 on the NSE on Wednesday after the government suspended the bidding process to appoint an asset appraiser for the divestiture of the lender had canceled.
The Center will call for a fresh request for proposal (RFP) for the appointment of the asset appraiser. This cancellation comes after the government extended the RFP four times.
In January, the government received several preliminary bids for the strategic sale.
In this strategic disinvestment initiative, the asset appraiser would be responsible for conducting a thorough review of multiple facets of IDBI Bank. This involves determining the fair value of the bank’s investments, loans and advances, with the aim of providing a comprehensive overview of its financial portfolio.
The valuation process involves an examination of IDBI Bank’s deposits, loans and other liabilities to gain a comprehensive understanding of the institution’s financial position.
By appointing an asset appraiser to assess the financial well-being of the bank, the government is seeking to promote transparency and fairness in the valuation procedures.
Last week, DIPAM secretary Tuhin Kanta Pandey said IDBI Bank’s strategic sale transaction was “on track” but the transaction would not be completed in the current financial year.
The government wants to offload its 30.48 percent stake in IDBI Bank, while India’s Life Insurance Corporation of India (LIC) will sell a 30.24 percent stake. Currently, the Indian government and LIC jointly own about 95 percent of IDBI Bank.
IDBI Bank’s shares have returned over 22 percent in the last 12 months, while this year’s gains have been around 10 percent, which is higher than the returns Nifty delivered in both periods.
According to data from Trendlyne, the stock is currently trading above its 200-day simple moving average (SMA), while it is below its 50-day SMA.