Indian Overseas Bank to cut govt's stake by up to 2.5% in Q4 via Rs 2,000 cr QIP, says CEO

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26 Aug, 2025 12:21

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Indian Overseas Bank is expected to reduce government of India’s stake in the bank of around 2-2.5 percent through qualified institutional placement (QIP) in the fourth quarter of the current financial year, Ajay Kumar Srivastava said.

“We have planned QIP worth Rs 2,000 crore in Q4 and it will reduce government stake by 2-2.5 percent,” Srivastava said while addressing the Moneycontrol’s query during the post earning conference call.

Currently, Central government holds 96.38 percent stake in Indian Overseas Bank, according to the investor presentation.

Earlier this month, as per reports, government approved fund-raising plans of up to Rs 10,000 crore for five PSBs through QIP, and additional stake sales via OFS.

The government approval is for qualified institutional placement (QIPs) of Rs 2,000 crore each, and offer for sale (OFS) of five banks -- Indian Overseas Bank, Bank of Maharashtra, Punjab & Sind Bank, UCO Bank and Central Bank of India, CNBC-TV18 reported citing sources.

The fund-raising will be executed in small tranches beginning the current financial year. The Department of Investment and Public Asset Management (DIPAM) has also been mandated to divest stakes via OFS to increase the public shareholding, said the report.

The Securities and Exchange Board of India (Sebi) requires all listed companies to maintain a minimum public shareholding of 25 percent.

The deadline for all public sector undertakings to adhere to the norm was August 1, 2024 but the government extended it to August 1, 2026.

Earlier today, Indian Overseas Bank reported 21 percent year-on-year rise in net profit in the October-December quarter (Q3) of financial year 2025. The bank's consolidated net profit stood at Rs 875.27 crore in Q3FY25 as against Rs 724.14 crore net profit reported in the year-ago period.

IOB reported Rs 7,115.88 crore as interest earned during the quarter, an increase of 15% from the interest earned in Q3FY 24. The bank's total income also saw a rise of 13% YoY at Rs 8,415.34 crore.