IDBI Bank share price plunges 16%; what’s behind the sell-off

Shares of IDBI Bank fell sharply in early trade on Monday, March 16, after sources indicated that the government’s strategic disinvestment plan for the lender may have been shelved.

The stock declined as much as 16 per cent in early trade, hitting an intraday low of Rs 77 per share on the NSE, as investors reacted to the latest developments around the long-pending stake sale.

Strategic sale likely scrapped

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According to Zee Business, the disinvestment process of IDBI Bank may not move ahead as financial bids submitted by potential buyers were below the reserve price set for the transaction.

Sources told Zee Business that the reserve price was considered high compared with the bank’s price-to-book valuation, which resulted in relatively lower bids from interested investors.

The disinvestment process had been underway since January 7, 2025, with the government planning to privatise the lender.

Key bidders in the race

Among the entities that had earlier shown interest in the bank’s strategic sale were Fairfax Financial Holdings and Emirates NBD, according to information reported earlier.

Government and LIC stake sale plan

At present, the Government of India holds 45.48 per cent stake in IDBI Bank, while Life Insurance Corporation of India owns 49.24 per cent in the lender.

Under the proposed disinvestment plan, the government and LIC together were planning to sell 60.72 per cent stake to a strategic buyer.

Post the transaction, the government’s stake was expected to fall to 15 per cent, while LIC’s holding would have been reduced to 19 per cent.

IDBI Bank Q3 FY26 performance

For the third quarter ended December 2025, IDBI Bank reported almost flat profit growth.

The bank posted a net profit of Rs 1,935 crore in Q3 FY26, compared with Rs 1,908 crore in the same quarter last year.

However, total income declined to Rs 8,282 crore, from Rs 8,565 crore in the year-ago period.

Interest income also moderated during the quarter, falling to Rs 7,074 crore from Rs 7,816 crore a year earlier.

On the asset quality front, the bank’s gross non-performing asset (NPA) ratio improved to 2.57 per cent as of December 31, 2025, compared with 3.57 per cent a year earlier.

However, net NPA remained unchanged at 0.18 per cent.

The bank’s capital adequacy ratio improved to 24.63 per cent, up from 21.98 per cent a year ago, while return on assets (ROA) moderated to 1.83 per cent in Q3 FY26, compared with 1.99 per cent in Q3 FY25.