Shares of IDBI Bank on Thursday rallied almost 7 per cent after the Centre gave an in-principle approval for strategic divestment along with transfer of management control in the lender.

The IDBI Bank’s share leapt 6.72 per cent or by Rs 2.55 to finish at Rs 40.50 on the BSE. During intra-day trades, it hit a high of Rs 43.50 — a rise of 14.62 per cent over the last close.

Following the gains, the market cap of the lender rose to Rs 43,547 crore. Similarly on the NSE, the scrip finished at Rs 40.55 — 6.85 per cent higher than the last close.

On Wednesday, the Cabinet Committee on Economic Affairs chaired by Prime Minister Narendra Modi had approved the strategic sale of IDBI Bank. The central government and LIC own more than 94 per cent equity of the lender.

LIC, currently the promoter of IDBI Bank with management control, has a 49.21 per cent stake. The government has said the extent of respective shareholding to be divested by it and LIC will be decided at the time of structuring of transaction in consultation with the RBI.

Finance minister Nirmala Sitharaman had announced the privatisation of public sector banks in the Union Budget for 2021-22.

LIC had completed the acquisition of a 51 per cent controlling stake in IDBI Bank in January 2019.

“LIC’s Board has passed a resolution to the effect that it may reduce its shareholding in IDBI Bank Ltd by divesting its stake along with a strategic stake sale envisaged by the government with an intent to relinquish management control and by taking into consideration price, market outlook, statutory stipulation and interest of policyholders,” the statement said.

This decision of the LIC board is also consistent with the regulatory mandate to reduce its stake in the bank, it added.

Tata Steel jumps

Shares of Tata Steel on Thursday closed with a gain of 3 per cent after the firm posted a consolidated net profit of Rs 7,161.91 crore for the quarter ended March 2021. The stock jumped 5.59 per cent to its 52-week high of Rs 1,128.80 on the BSE. It closed at Rs 1,100.55, a gain of 2.96 per cent.

On the NSE, it closed 3.06 per cent higher at Rs 1,103. During the day, it rallied 5.49 per cent to Rs 1,129 — its one-year high.