IDBI Bank Stock Surges to 52-Week High Amid Progress in Divestment Process

IDBI Bank's stock experienced a significant rally, hitting a 52-week high of ₹106.99 on Friday, marking a 9% increase on the BSE amidst substantial trading volumes. The stock surpassed its previous high set in June 2025. At the time of reporting, it was trading 7% higher, outperforming the broader BSE Sensex which saw a slight decline. Trading volumes doubled, with millions of shares changing hands.

This stock performance is occurring as the strategic divestment process for IDBI Bank gains momentum. Media reports suggest that financial bids are likely to be invited by October 2025. An inter-ministerial group comprising secretaries from the Department of Investment and Public Asset Management (DIPAM) and the Department of Financial Services (DFS) is scheduled to meet on October 31 to finalize the bidding process and approve the Share Purchase Agreement (SPA). The SPA is a crucial document outlining buyer obligations, management control transfer, and post-sale responsibilities.

The Government of India and Life Insurance Corporation of India currently hold a combined 94.71% stake in IDBI Bank and have expressed their intent to divest this holding, transferring management control to a new investor. Expressions of interest were initially invited in October 2022.

In addition to the divestment news, IDBI Bank has shown improving asset quality. Its gross non-performing assets (NPAs) declined to 2.65% in the September 2025 quarter, down from 3.68% a year earlier, while net NPAs reduced to 0.21%. This improvement is attributed to NPA recoveries, reduced slippages, and a high provision coverage ratio.

Impact: This news is highly positive for IDBI Bank's stock as it indicates concrete progress in the divestment process, which could lead to a significant strategic sale. Investor confidence may increase due to the stock's strong performance and the bank's improving financial metrics. The divestment could bring in new management and capital, potentially transforming the bank's future outlook. The market sentiment towards the banking sector, especially PSU banks undergoing divestment, could also be influenced. Rating: 8/10

Difficult Terms: 52-week high: The highest price at which a stock has traded over the past 52 weeks. Intra-day trade: Trading activity that occurs within a single trading day. BSE Sensex: A benchmark index of 30 well-established, large-cap stocks listed on the Bombay Stock Exchange. Trading volumes: The number of shares of a security that are traded during a given period. Equity shares: The most common type of stock, representing ownership in a corporation. Divestment: The act of selling off an asset or subsidiary. Financial bids: Offers made by potential buyers in the final stage of an acquisition process, stating the price they are willing to pay. Inter-ministerial group (IMG): A committee formed by representatives from different government ministries to discuss and decide on specific issues. Strategic sale: The sale of a controlling stake in a public sector undertaking to private entities. Share Purchase Agreement (SPA): A legally binding contract between a buyer and seller detailing the terms and conditions of the sale of shares. Expressions of Interest (EoI): A document submitted by a potential buyer to express their interest in a transaction, often the first step in a divestment process. Stake sale: The selling of a portion of ownership in a company. Asset quality: The financial health and risk associated with a bank's assets, particularly its loans. Gross non-performing assets (NPAs): Loans on which the borrower has failed to make interest payments for a specified period (usually 90 days). Net NPAs: Gross NPAs minus the provisions made by the bank for these bad loans. Provision coverage ratio: The ratio of the total provisions made by a bank against its non-performing assets to the total gross NPAs. Slippages: The amount of performing assets that turn into non-performing assets during a financial period. Capitalisation: The amount of capital a bank holds, typically as a percentage of its risk-weighted assets, indicating its ability to absorb losses.