Business · Markets · 2 hrs ago
IDBI Bank shares rose on privatization hopes, then fell after approval
Over the past year, IDBI Bank shares have posted their strongest average returns on Wednesdays, often giving back ground the next day.
On 14 October, India’s Cabinet Committee on Economic Affairs approved the sale of a 60.72% stake held by the government and LIC.
The stake is to be sold to Canada Inc., the parent company of Fairfax Financial Holdings, for ₹52,878 crore.
Shares rose 8.98% on Wednesday ahead of the announcement, then fell 8.1% on Thursday as investors booked profits.
The pattern does not mean Wednesdays reliably lift the stock: trading spikes around major announcements account for much of the higher average.
After the sale, the government will hold 15% and LIC 19%, leaving them with a combined 34% minority stake as the government reduces investments in non-core assets.
IDBI Bank shares rose 8.98% on 14 October as investors anticipated an announcement on the bank’s privatization.
The Cabinet Committee on Economic Affairs approved the sale of a 60.72% stake held by the government and Life Insurance Corp to Canada Inc. for ₹52,878 crore.
On 15 October, the shares fell 8.1% to ₹83.07 on the National Stock Exchange, erasing almost all of the previous session’s gains.
Mint’s analysis found the bank’s shares had their strongest average returns on Wednesdays over the past year, while Thursdays had an average return of negative 0.8%.
A Choice Broking analyst said Wednesday’s higher average trading volume reflected a few event-led spikes, rather than a consistent weekday effect.
- Who
- The government and Life Insurance Corp are selling a stake in IDBI Bank to Canada Inc., the parent entity of Fairfax Financial Holdings.
- What
- The Cabinet Committee on Economic Affairs approved the sale of a 60.72% stake for ₹52,878 crore. IDBI Bank shares rose on 14 October and fell the following day.
- When
- The approval and 8.98% share-price rise came on 14 October; the shares fell on 15 October.
- Where
- The share-price decline was recorded on the National Stock Exchange.
- Why
- Investors anticipated a government announcement about the privatization; profit booking followed the previous session’s rise.
This story does not have two clearly opposing sides.
The Cabinet Committee on Economic Affairs approved the sale of a 60.72% stake in IDBI Bank, and the shares closed 8.98% higher.
The shares fell 8.1% to ₹83.07 on the National Stock Exchange, erasing almost all of the previous session’s gains.
- Stake approved for sale
- 60.72%
- Sale value
- ₹52,878 crore
- Buyer's parent entity
- Canada Inc., parent of Fairfax Financial Holdings
- Share-price rise
- 8.98% on 14 October
- Share-price fall
- 8.1% on 15 October; closed at ₹83.07
What people are saying
Wednesday has recorded higher average trading volume than most other weekdays, but this appears to be driven by a few event-led spikes, rather than a consistent weekday effect