InvestorQ : Why did Shares of IDBI Bank fall so sharply on Tuesday?
Angel dcosta made post

Why did Shares of IDBI Bank fall so sharply on Tuesday?

Juvina Maggie answered.
2 years ago

IDBI Bank stock fell by nearly 20% in early trades on Tuesday as more than 37 crore shares allotted to qualified institutional buyers started trading in the market. This dilution of equity led to the sharp crack in prices of IDBI Bank. On account of the dilution, the stocks has been lower for 4 days in succession and has lost nearly 27% in this period.

The shares were finally allotted at a price of Rs.38.60, which represents a discount of nearly 5% to its floor price of Rs.40.63 per share. Some of the major institutions that got allotted above 5% included PNB-21%, BOB-14%, SBI-14%, Indian Bank-7%, Canara Bank-7%, among others. The buyer list was dominated by PSU banks.

Post the allotment to QIBs, the stake of LIC had fallen below 51%. Hence IDBI Bank now had an option to draw Rs.1500 crore as equity capital from its principal promoters, LIC of India. Even LIC has confirmed that it has the leeway to infuse another Rs.1500 crore into the capital base of IDBI Bank.