Government Stake In Indian Overseas Bank Falls To 92.44% After OFS

The Government of India has reduced its stake in Indian Overseas Bank after selling 2.17% equity through an offer for sale, according to an exchange filing. Following the transaction, the government’s shareholding in the public sector lender has come down to 92.44%.

The stake dilution comes against the backdrop of a strong operating performance by the lender in the September quarter.

In the previous quarter, Indian Overseas Bank reported a 58% year-on-year rise in standalone net profit to Rs 1,226 crore, compared with Rs 777 crore in the corresponding quarter last year. Net interest income increased 20.53% YoY to Rs 3,059 crore, reflecting improved core earnings momentum.

Profitability metrics strengthened during the quarter, with domestic net interest margin rising 14 basis points YoY to 3.35%, while global NIM expanded to 3.21%, up 13 bps from the year-ago period.

Asset quality also continued to improve. Gross non-performing assets declined to 1.83% in the quarter, compared with 2.72% in the same quarter last year and 1.97% in the previous quarter, indicating sustained progress in balance-sheet clean-up.

Indian Overseas Bank raised Rs 1,436 crore in March this year through a qualified institutional placement, issuing 35.41 crore shares to eligible institutional investors.

Life Insurance Corporation of India (LIC) emerged as the largest allottee, receiving 34.8% of the QIP shares. IIFL Finance was allotted nearly 14%, while SBI Pension Fund and LIC Pension Fund were each issued 7% of the shares under the offering.

Shares of the bank closed 0.15% lower at Rs 34.03 apiece, as compared to a 0.58% advance in the benchmark NSE Nifty 50.