IDBI Bank shares came under pressure on Monday, falling 3.60% intraday to hit a low of ₹110.70, despite the bank reporting strong business growth for Q3 FY26. The bank's total business reached ₹5.47 lakh crore as of December 31, 2025, representing a robust 12% year-on-year growth, driven by healthy performance across deposits and lending segments.

Key Financial Performance

The bank's provisional figures demonstrate strong operational momentum across all major business parameters:

Robust Credit Growth Drives Performance

The bank's lending portfolio showed particularly strong momentum, with net advances growing 15% year-on-year to ₹2.39 lakh crore. This significant increase from ₹2.07 lakh crore in the corresponding period reflects improved credit offtake and demand revival across various sectors. The lending growth outpaced overall business expansion, indicating the bank's successful focus on expanding its credit portfolio.

Deposit Base Expansion Continues

Total deposits reached ₹3.08 lakh crore, marking a 9% year-on-year increase from ₹2.82 lakh crore. The bank's CASA deposits, representing low-cost funding sources, stood at ₹1.36 lakh crore, showing a 4% year-on-year growth from ₹1.31 lakh crore. CASA deposits now constitute approximately 44% of total deposits, reflecting a healthy funding mix that supports the bank's profitability prospects.

Stock Performance Shows Mixed Signals

Despite the strong operational performance, IDBI Bank shares declined on Monday, contrasting with the bank's fundamental growth metrics. However, the stock has delivered impressive returns over longer periods, rising 44.36% over the past year and gaining 7.90% year-to-date. The stock has also advanced 10.68% over the last six months and registered a 20.92% gain over the past three months, with a 14.88% increase over the last month.

Regulatory Compliance and Outlook

The business update was filed in accordance with SEBI regulations, with the bank noting that December 31, 2025 figures remain provisional and subject to statutory auditor review. Detailed financial results for the quarter will be announced later, providing comprehensive insights into the bank's profitability and asset quality metrics. The consistent growth across key business parameters reflects IDBI Bank's operational efficiency and strategic execution in expanding its market presence.

The government's disinvestment process for IDBI Bank has reached a critical milestone with the inter-ministerial group clearing all decks for the bidding process. Sources indicate that financial bids for the stake sale are likely to be invited within a week, marking significant progress in one of the major banking sector privatizations.

Timeline and Process Updates

The Centre is expected to upload the invitation for financial bids on the Department of Investment and Public Asset Management (DIPAM) website shortly. The final draft of the share purchase agreement has received approval, streamlining the path forward for potential bidders.

Ownership Structure

The Centre and Life Insurance Corporation of India will jointly divest their combined 60.70% stake in the lender. Current ownership data reveals the government's significant control over the bank.

Market Dynamics and Potential Bidders

IDBI Bank's market capitalization of over ₹1 lakh crore presents challenges for investors seeking to acquire the 60% stake. Sources suggest Kotak Mahindra Bank emerges as the frontrunner, potentially structuring a part-cash and part-equity merger deal leveraging its equity currency advantage.

The disinvestment landscape has evolved since the process began. While Emirates NBD and Fairfax were initially primary suitors and conducted due diligence, Emirates NBD subsequently announced a $3 billion investment to acquire majority stake in RBL Bank.

Strategic Significance

The IDBI Bank disinvestment, first announced in 2022, gained momentum this year as part of the government's broader privatization agenda. The transaction represents a key component in reducing government stake in public sector enterprises while aiming to improve operational efficiency and unlock stakeholder value.