Indian Overseas Bank Launches QIP to Raise Rs 2,000 Crore

Indian Overseas Bank (IOB) has embarked on a significant financial maneuver by launching a Qualified Institutional Placement (QIP) aimed at raising Rs 2,000 crore. This strategic move is set to decrease the central government's shareholding in this state-run bank, which currently stands at 96%. The Chennai-headquartered bank's initiative aligns with the Securities and Exchange Board of India's (SEBI) mandate for listed companies to maintain a minimum public shareholding (MPS) of 25%.

For the first time in a decade, the public sector bank is turning to the market to bolster its finances. IOB's MD & CEO, Ajay Kumar Srivastava, anticipates a reduction of 3%-4% in the government's shareholding. The QIP, available to qualified institutional buyers (QIB) for three days, has a floor price set at Rs 42.7 per equity share, with the possibility of offering a discount of up to 5% on this price.

Long-term Infrastructure Bonds Approved

In addition to the QIP, the IOB board has greenlit the issuance of long-term infrastructure bonds amounting to Rs 10,000 crore. These bonds, to be issued in one or more tranches, are intended for financing or refinancing infrastructure and affordable housing projects. Srivastava mentioned that the issuance of these infra bonds is planned for the next fiscal year (FY26).