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Informist, Monday, Jul. 20, 2026

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By Vaishali Tyagi and Kabir Sharma

MUMBAI – Indian Overseas Bank plans to raise up to INR 50 billion through equity in the December quarter in one or more tranches, depending on market conditions, the public-sector bank's management told analysts in a post-earnings call Monday.

 

On May 21, the bank's board of directors had approved its fund-raising plan for the financial year 2026-27 (Apr-Mar). The state-owned bank plans to raise equity capital of INR 50 billion by way of a follow-on public offer, rights issue, qualified institutional placement, or preferential issue of shares, or any combination of these modes. The funds will be raised in one or more tranches, the bank had then said.

 

The bank also plans to raise INR 10 billion via tier-II bonds in FY27, depending upon requirement, with or without a greenshoe option. "It is true that 5,000 crores (INR 50 billion) capital-raising plan has been approved by the board... and we are in the process of obtaining all other statutory approvals before hitting the market," the management said. "So maybe in Q3 (Oct-Dec) or Q4 (Jan-Mar), depending on market conditions, we will go to the market, maybe in one or two or maybe more than two tranches."

 

Indian Overseas Bank declared its financial results for the June quarter during market hours. The bank reported robust growth in net profit for the quarter. Its profit rose almost 50% on year and over 10% on quarter to INR 16.59 billion. This was led by a rise of over 23% in total income to INR 109.38 billion. Monday, the bank's shares ended at INR 35 on the National Stock Exchange, up over 3% from Friday.

 

The management said it does not see any challenge in maintaining profitability at the current level. The net interest income has grown a little over 34% on year. That shows lending activity and liabilities management are driving profitability, it said.

 

"Interest income is increasing quarter-on-quarter, year-on-year," the management said. "Going forward, I do not see any challenge in maintaining this profitability. And last 10 quarters, if you see the trend of operating profit and net profit, quarter-on-quarter, it is only one-dimensional, that is increasing."

 

On the business front, the management sees its corporate loan book growing by 12-13% by the end of the financial year 2026-27 (Apr-Mar). In the June quarter, the bank reported a fall of over 10% sequentially in corporate advances to INR 444.05 billion. On year, corporate advances are down nearly 14%.

 

The bank's global advances grew nearly 23% on year to INR 3.22 trillion in the June quarter. Of the total global advances, the retail, agriculture, and micro, small, and medium enterprises segment grew faster than overall advances at nearly 36% year-on-year to INR 2.62 trillion.

 

The bank expects its credit cost to be in the range of 0.35-0.40% in FY27. Indian Overseas Bank's credit cost stood at 0.14% in the June quarter, down from 0.30% in the March quarter and 0.29% in the year-ago quarter.

The bank also plans to announce a dividend by the end of FY27, subject to board approval, through internal accruals from net profit and share premium. "In this financial year, we will be very happy to announce a dividend, of course in consultation with the board," the management said.

 

The management said Indian Overseas Bank's return on assets stood at 1.14% in the quarter ended June. "We are very comfortable with these numbers... internally, we want to maintain RoA above 1.20% at all times. Going forward, by the end of this year and over the next three years, we are looking at around 1.45-1.46%," it said.  End

 

Edited by Rajeev Pai

 

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