IDBI shares have risen more than 23% from Rs 76.30 on December 29 to Rs 93.90 today, due to the scuttlebutt that IDBI will follow IFCI and ICICI in selling stakes that it holds in other institutions
MUMBAI: IDBI Bank chairman and managing director, V P Shetty says the bank will sell its stake in premier institutions like Stock Holding Corporation of India (SHCIL), Small Industries Development Bank of India (SIDBI), National Stock Exchange (NSE) and National Securities Depository (NSDL) “only when the market is optimal”.
He was referring to the buzz in the market on the issue.
He denied that there is any directive from the government on this. “I don’t know where these rumours came from. But the decision (to sell stake) rests only with our top management and we will unlock value when the market is optimal,” Shetty said, after announcing the bank’s third-quarter results.
IDBI shares have risen more than 23% from Rs 76.30 on December 29 to Rs 93.90 today, due to the scuttlebutt that IDBI will follow IFCI and ICICI in selling stakes that it holds in other institutions. IDBI officials refused to speculate on how soon they may sell or how long they will hold stake. “It is our family silver we may sell or even decide to hold,” said Jitender Balakrishnan, deputy managing director, IDBI Bank. However, pressure on funding for banks may force IDBI to take the decision sooner than later, said analysts.
Shetty admitted that there is pressure to garner funds. “The market is going haywire in terms of rates… and deposit rates are also skyrocketing. We are also a part of the market and we would concentrate on long-term and regular advances from now on,” Shetty said.
Later, speaking to DNA Money, Shetty said that “more funds are always welcome” but reiterated the bank has still not decided on the stake sale.
Shetty also said that the bank has settled “all pending issues” with regard to employee wages. “We have agreed on a mutually accepted principles and I have already made provisions of Rs 110 crore for the salary arrears of all employees between November 1, 2002 and March 31, 2006. This month they will get a revised salary and their arrears will be paid in the next 15 days,” Shetty said.
The bank announced a net profit of Rs 126.79 crore in the third quarter of 2006-07 versus Rs 119.3 crore in the corresponding quarter of the previous year. Out of the total net profit, about Rs 19 crore was on account of amalgamation of the erstwhile United Western Bank in October 2006, officials said.
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