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Informist, Wednesday, Jan. 14, 2026

 

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–-Indian Overseas Bk: Likely to raise INR 40 bln via QIP in Q4 
--CONTEXT: Indian Overseas Bk's mgmt speaks at analyst call post Q3 earnings 
--Indian Overseas Bk:Aim to cut gross NPA ratio by 5-7 bps in Q4 vs 1.54% Q3 
--Indian Overseas Bk: Aim to be in position to pay dividend in FY27 
--Indian Overseas Bk: No information, communication from govt on bank merger 
--Indian Overseas Bk: Aim to maintain NIM at 3.3-3.4% going forward 
--Indian Overseas Bk: See credit growth of 24-25% in FY26
 

 

By Divya Moolayattil and Krity Ambey

 

MUMBAI/NEW DELHI – Indian Overseas Bank has approval to raise up to INR 40 billion through a qualified institutional placement and may do it in the current quarter, the bank's management said Wednesday. The QIP should help the bank reduce the government's stake to 88% from the current 92.4%, management said during an analyst conference call after announcing the December quarter results.

 

The bank plans to undertake additional exercises in the next financial year to offload the government's stake and meet the Securities and Exchange Board of India's minimum public shareholding norm, according to management. However, the bank did not specify whether there would be additional QIP or an offer for sale. 

 

On bank consolidation, the management of Indian Overseas Bank said it has not received any information or communication from the government regarding a merger with another bank. There were media reports in December suggesting that the government is looking to undertake a round of bank consolidation and Indian Overseas Bank was likely among the possible candidates.

 

The bank reported a net profit of INR 13.65 billion in the December quarter, up 56% from a year ago. The bank reported credit growth of 24% on year in the reporting quarter. Based on this, management believes the bank's credit growth in 2025-26 (Apr-Mar) will be 24–25%.

 

The bank's gross non-performing ratio improved 29 basis points sequentially to 1.54% as of Dec. 31. Management said it aims to lower the gross NPA by another 5–7 bps in the March quarter.

 

The lender's net interest margin also rose to 3.33% as of Dec. 31 from 3.21% as of Sept. 30. The bank's management said it aims to maintain its margin at 3.3-3.4% going forward. With these metrics, the bank expects to be in a position to pay a dividend in the next financial year, the management said.

 

The bank's shares rose to INR 35.41 after the results were announced from the opening level of INR 35.33. Wednesday, shares closed 2.1% higher at INR 36.11 on the National Stock Exchange.  End  

 

Edited by Saji George Titus

 

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