Government Lowers Stake in Indian Overseas Bank with Successful Share Sale

The government's stake in Indian Overseas Bank decreased by 2.17% to 92.44% after completing a successful offer-for-sale. Despite high demand, leading to the exercise of the green shoe option, the subscription only reached 0.17%. The sale aligns with regulations mandating public sector entities to maintain a minimum public shareholding.

The Indian government has reduced its stake in the state-owned Indian Overseas Bank (IOB) by 2.17%, bringing its holding down to 92.44% following an offer-for-sale (OFS) concluded on December 18. The transaction aligns with regulations requiring public companies to increase public shareholding to at least 25%.

Initially, the government proposed selling 38.51 crore shares, representing a 2% base offer, with an option to sell an additional 19.25 crore shares. The proposal received demand exceeding 41 crore shares, prompting the government to activate the green-shoe option, though it was subscribed to only 0.17%.

Before the OFS, the government's stake in the Chennai-based bank was 94.61%. These actions are part of broader efforts to comply with Securities and Exchange Board of India rules, aimed at increasing transparency and market discipline, with a forbearance period for CPSEs lasting until August 2026.

(With inputs from agencies.)