IDBI Bank shares surged more than 6 percent intraday Friday after a media report indicated that Asian Development Bank is in race to buy stake in the public sector lender. "Multilateral agency Asian Development Bank has held talks
with the government to acquire 10-15 percent stake in IDBI Bank as negotiations with World Bank arm International Financial Corporation have slowed down," a media report said quoting unnamed sources. A team comprising Christine Engstorm, director in the private sector financial institutions division, along with her colleagues Julian Chenoweth and Asif Cheema met top finance ministry functionaries, including minister of state Santosh Gangwar late last month to discuss the proposal, the report added. The Government of India held 73.98 percent stake in the bank, as per latest shareholding pattern available on the exchange (June 2016). Foreign portfolio investors have 2.39 percent shareholding and insurance companies including LIC held 15.13 percent stake. The report said ADB, along with IFC and Commonwealth Development Corporation (CDC) were in the fray to buy into IDBI Bank, where the government is open to cutting its stake below 51 percent, something it can't do in other state-run lenders, given restrictions imposed by the law. The stock has surged 44 percent since February 29, 2016, when the Finance Minister Arun Jaitley in Union Budget speech announced dilution of stake in the bank. At 11:23 hours IST, the scrip of IDBI Bank was quoting at Rs 79.60, up Rs 4.00, or 5.29 percent on the BSE.
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