Is IDBI Bank a good buy since it has been taken out of PCA framework?

General
1

Today IDBI was up 10% on news of RBI taking IDBI out of PCA framework, now Is IDBI Bank a good buy since it has been taken out of PCA framework?

I believe since it has been taken out of that framework the bank’s financial has improved. But looking at the https://www.screener.in/company/IDBI/consolidated/ it has a lot of negatives like

Company has low interest coverage ratio.
The company has delivered a poor sales growth of -5.83% over past five years.
Company has a low return on equity of -40.75% for last 3 years.
Contingent liabilities of Rs.127030.95 Cr.
Company might be capitalizing the interest cost
Earnings include an other income of Rs.4988.30 Cr.

Majority stake is with GOI and there are news that it will be privatized. If it does will it be beneficial for current shareholders? How to assess possible scenarios and it’s effect on share price?

2

It’s definetly a positive impact on

IDBI Bank as after it is out from PCA Framework now it can give loans to Corporates also earlier it has a ban on that also gov of india and lic both will sell the stakes in idbi to shedd off the control on idbi and this process is going faster as cabinet approval will be done within 2 weeks so it completely depends upon you to invest or not. This forum Doesn’t allow to give Buy/Sell recommendations on stocks.

3

My concern is whether it will get considerable response if GOI sells stake?

4

Ofcoure Yes, Market Considers Privatisation as good decision because If govt. entity is going to privatise then it’s value gets unlocked, competetion gets increased and good startegies will be made by new CEO or Promoter. Also talking about general, people prefers private banks over psu banks due to their customer relations and fast processing of work.