IDBI Bank shares plunged 7% to Rs 85.8 in early trading on Monday, triggering a wider selloff across the BSE BANKEX index. The sudden drop follows reports that the Indian government is scrapping its long-delayed divestment of the lender after financial bids fell short of the minimum reserve price.
The collapse of the proposed 60.72% stake sale coincides with severe macroeconomic turbulence across global markets. Reports of a United States military strike on Iran’s Kharg Island oil hub have pushed Brent crude oil past $100 a barrel, dragging the Indian Rupee to a record low of over 92 against the US Dollar and sparking a massive equity selloff.
Divestment Process Stalls
The government and the Life Insurance Corporation of India had sought to offload their majority holding in IDBI Bank. Prospective buyers, reportedly including Fairfax Financial and Emirates NBD, submitted financial bids that failed to meet the government’s valuation expectations. Following the news, IDBI shares extended their losses intraday, crashing as much as 15% and nearing a 52-week low.
The broader business sector in India absorbed heavy losses during the session. The BSE BANKEX index fell 0.4% to 60,198.5. Peer institutions Federal Bank and IndusInd Bank both recorded 2.0% declines. Over 400 Indian stocks have suffered double-digit percentage drops in recent weeks amid the geopolitical crisis.
Underlying Financials
Despite the Monday morning crash, IDBI Bank shares remain up 18% over the trailing 12-month period. The bank reported a 1.6% year-over-year net profit growth to Rs 19,594 million for the quarter ending December 2025. The stock currently trades at a price-to-earnings ratio of 9.9.