Shares of public sector lender Indian Overseas Bank (IOB) tanked as much as 5.7 percent to Rs 41.01 to hit a 52-week low for a second session in a row on March 3 after it announced that it has received a Rs 699.52 crore demand notice from the Deputy Commissioner Chennai over alleged GST liabilities for the assessment year 2020-21.
The notice, dated February 27, 2025, includes a Rs 35.26 crore penalty, along with tax and interest.
The demand follows an annual scrutiny of GST filings, during which authorities flagged discrepancies. However, the bank maintains that it has a strong case and, based on expert legal opinion, believes the demand lacks legal merit.
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IOB has taken the legal route to challenge the notice and expects the appellate authorities to overturn the order. The bank also assured that the demand will have no material impact on its financials, operations, or business activities.
The bank reported an impressive 21 percent year-over-year rise in net profit in the October-December quarter (Q3) of the 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.
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IOB reported Rs 7,115.88 crore as interest earned during the quarter, an increase of 15 percent from the interest earned in Q3FY 24. The bank's total income also saw a rise of 13 percent YoY at Rs 8,415.34 crore.
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At the end of December, the Government of India held a 96.38 percent stake in Indian Overseas Bank (IOB). That same month, the lender received confirmation of a Rs 1,359.29 crore income tax refund for the assessment year 2015-16, including interest under Section 244A.
The refund order, dated August 17, 2024, follows earlier rulings by the Commissioner of Income Tax (Appeals) in March and December 2023. IOB was notified of the order via the Income Tax Portal on December 10, 2024.
Meanwhile, the bank reported a 24.4 percent year-on-year (YoY) increase in net profit for the second quarter ended September 30, 2024, reaching Rs 777.2 crore, up from Rs 624.6 crore in the same period a year ago.
At about 2:20 pm, shares of the company were trading at Rs 41.77, lower by 4.04 percent from the last close on the NSE. IOB's share price has tanked nearly 16 percent since the start of the year.
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