Shares of IDBI Bank Ltd surged over 9% to hit a four-month high of Rs 43.85 on BSE after a Bloomberg report said the government is considering selling 51% stake in the lender.
At 10.03 am, the stock was trading at Rs 43.50, up 8.3% from its previous close. Since the start of June, the stock has advanced 46% whereas so far this year it has declined 8%.
Other mid-sized public sector banks were also trading higher on hopes of privatisation. The government in its budget had said that it would divest IDBI Bank and privatise two public sector banks.
Union Bank of India rose 5%, Central Bank of India 2%, Bank of India 3.4%, UCO Bank 2.6%, Indian Bank 2.5%, Punjab National Bank 2.4%, Indian Overseas Bank 2%, and State Bank of India and Bank of Baroda rose 1% each.
Life Insurance Corp and the government together hold over 98% stake in IDBI Bank. LIC had bought a 51 per cent stake in IDBI Bank in 2019 for Rs 21,624 crore at an average price of Rs 61 per share.
The government and LIC will formally seek to gauge buyer interest as soon as the end of September, the Bloomberg report said.