Indian Overseas Bank Launches ₹2,000 Crore QIP to Meet Minimum Public Shareholding Norms

State-run lender Indian Overseas Bank (IOB) has launched a Qualified Institutional Placement (QIP) to raise up to ₹2,000 crore as part of its capital-raising strategy.

QIP Details and Pricing

The base size of the QIP issue is ₹1,000 crore, with an option to upsize the issue by an additional ₹1,000 crore, taking the total potential fundraising to ₹2,000 crore. The total issue, including the upsize option, will comprise 49.28 crore shares.

IOB has set the floor price for the QIP at ₹42.7 per share, reflecting a 2.5% discount to Wednesday’s closing price of ₹43.78. The indicative issue price is ₹40.57 per share, marking a 7.3% discount to the previous closing price and a 5% discount to the floor price.

Government’s Stake and Regulatory Compliance

The QIP launch aligns with the government’s push to meet the minimum public shareholding norms, which require all public sector banks (PSBs) to maintain at least 25% public shareholding by August 2026.

As of the December 2024 quarter, the government held a 96.38% stake in Indian Overseas Bank. The QIP issuance will help the lender move closer to compliance with regulatory norms while enhancing its capital base for future growth.

Stock Performance 

On March 20, 2025, Indian Overseas Bank share price traded 1.14% lower at ₹43.30 at 10:14 AM (IST). Indian Overseas Bank’s share price reached a 52-week high of ₹75.45, and a 52-week low of ₹40.60. As per BSE, the total traded volume for the stock stood at 2.52 lakh shares with a turnover of ₹1.11 crores.

At the current price, Indian Overseas Bank shares are trading at a price-to-earnings (P/E) ratio of 26.41x, based on its trailing 12-month earnings per share (EPS) of ₹1.64, and a price-to-book (P/B) ratio of 2.88, according to exchange data.

Conclusion

By tapping into institutional investors, Indian Overseas Bank aims to strengthen its financial position and improve liquidity. The move is also expected to enhance the bank’s market credibility and align it with broader banking sector reforms aimed at improving governance and operational efficiency in public sector banks.

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