IOB to raise Rs 1,626 cr via preferential shares

The board of directors of Indian Overseas Bank has cleared the bank’s proposal to raise Rs 1,626 crore from the Government and Life Insurance Corporation through preferential allotment of equity shares, the Bank said in a regulatory filing.

IOB will issue equity shares of face value of Rs 10 with premium on preferential basis to the Government and LIC up to an amount of Rs 1,626 crore. It decided to issue perpetual bonds to the extent of Rs 2,497 crore and to authorise its Chairman and Managing Director to fix the size of the issue and finalise the terms and conditions, including fixation of coupon rate depending upon the market conditions.

The chairman may further be authorised to take actions in connection with issue of perpetual bonds, either domestically or overseas, according to the announcement.

The board meeting was held in the wake of the Government’s decision to infuse capital to the extent of Rs 1,200 crore to IOB.

The Government will be allotted shares to the tune of Rs 1,200 crore while LIC will be getting shares to the extent of Rs 426 crore. The government’s stake in IOB currently stands at 78.2 per cent.

IOB recently said it would require up to Rs 2,100 crore capital for the current financial year, and it was planning to raise around Rs 900 crore through QIP or private placement.

ravikumar.r@thehindu.co.in

Source: thehindubusinessline