Indian Overseas Bank will launch Rs 4,000 crore of Qualified Institutional Placement (QIP) in the third quarter of the current financial year, managing director and chief executive officer Ajay Srivastava said during the post-Q1 earnings media call.
The bank will complete the fundraising through QIP in one or more tranches, Srivastava said.
He added that the process of engagement with the merchant banker for the QIP has started by the bank and awaiting few approvals from the authorities for the launch.
Post the QIP, the shareholdings of government in the bank will reduce to 90 percent, from current 94.81 percent as on June 30, 2025, Srivastava added.
On July 2, shareholders of Indian Overseas Bank approved the proposal to raise Rs 4,000 crores (including share premium, if any), in one or more tranches, by way of Follow-on Public Offer/Rights Issue/ Qualified Institutional Placements / Issue of Shares to Employees.
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.
Additionally, Srivastava said that the bank is expected to take a hit of 5-10 basis points (Bps) on the net interest margins (NIM) in the second quarter of financial year 2026 due to interest rate cutting cycle.
In April-June quarter, NIM shrinked to 3.04 percent, from 3.06 percent in a year ago period.
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