IDBI Bank hurtled up on Wednesday on reports that at least six banks have displayed interest in picking up stake in the IDBI-promoted bank.

With such keenness, investors rallied around the counter of the private sector bank propelling it higher by 3.66% to Rs 21.25, by 10:20 IST. Volumes of 9,145 IDBI Bank shares were recorded on BSE by then. But it's not been all hunky dory for the stock of late as it slipped 34.4% to Rs 20.50 from Rs 31.25 between 22 January and 25 March 2003.

It has been reported that at least six banks (some of them foreign) have shown interest in acquiring a stake in IDBI Bank. Informal talks for stake acquisition with IDBI (the parent of IDBI Bank with a 57% stake) have already begun, it is believed.

As per reports HDFC Bank, ICICI Bank, Kotak Mahindra Bank and Citibank are the ones involved in talks with IDBI at the moment.

Meanwhile, the corporatisation of IDBI is still pending with the parliamentary standing committee, and final reports are awaited. There is talk that the committee is in favour of merging IDBI with IDBI Bank. This would imply, perhaps, that until a decision is taken by the committee, even the stake acquisition talks may not come to fruition.

Earlier, there were reports that IFC, Washington, an arm of the World Bank, was keen on acquiring a substantial stake (belonging to IDBI) in IDBI Bank. Investors like DBS Singapore, Barclays of UK, JP Morgan, Newbridge, Ankar and Chrysalis, were also reported to be interested in a stake. A 26% stake sale will take IDBI Bank's paid-up capital to Rs 190 crore, from Rs 140 crore at present. IDBI holds 57% equity in the bank, while the public and institutions hold 14.5% and 8.91%, respectively

During the time of announcing its third quarter results, the bank approved a proposal to raise Tier II capital by up to Rs 40 crore. The bank expects to raise the capital in one or more tranches.

For the third quarter ended 31 December 2002, IDBI Bank registered a massive 206.8% rise in net profit to Rs 27.43 crore compared to Rs 8.94 crore in the corresponding period last year. Net interest income also increased by 58% to Rs 53.15 crore. The bank registered a total income of Rs 214.91 crore (Rs 2.14 billion), up from Rs 149.76 crore (Rs 1.49 billion) in DQ 2001 (a rise of 43.5%).