IDBI Bank stock crashes 10.5% as disinvestment uncertainty deepens

Shares of IDBI Bank plunged by 10.5 percent on Tuesday, closing at ₹81.22 on the NSE, as lingering uncertainty surrounding the government's proposed stake sale continues to dampen investor sentiment. The stock plummeted to an intraday low of ₹79.05 before stabilizing, with a surge in trading volume to 690.74 lakh shares, amounting to ₹571.93 crore.

This sell-off follows a delay in the strategic disinvestment, where the government and LIC jointly aim to divest a combined 60.72 percent stake in the bank. The disinvestment process had previously halted after bids did not meet the government's reserve price, with Canada-based Fairfax Holdings seen as a potential bidder. Kranthi Bathini, Director of Equity Strategy at WealthMills Securities, attributes the decline to the disinvestment-related uncertainty, stating that the market has been eagerly awaiting a resolution but none is forthcoming, leading to short-term selling pressure.

Abhinav Tiwari, Research Analyst at Bonanza, highlights that the stock has been particularly sensitive to news about the government's proposed stake sale. Earlier, the strategic sale process faced delays due to bids failing to surpass the government's reserve price. Concerns about the deal's structure have also reemerged, with former Secretary to the Government of India, EAS Sarma, warning in a letter to Finance Minister Nirmala Sitharaman that the transaction could lead to a mandatory open offer under SEBI's takeover regulations.

Sarma raised issues regarding foreign ownership limits, Fairfax's current stake in CSB Bank, and employee service conditions. On a technical level, Bank Nifty closed at its lowest since July 2026, dropping below its 20-day, 50-day, and 100-day EMAs, with support at 56,300 identified as the immediate level.