Indian Overseas Bank shares dip 4% as government plans to divest 3% stake via OFS; all you need to know

At the current market price, the government would be able to garner about ₹2,100 crore by offloading up to a 3% stake in the bank.

The government proposes to sell up to 38.51 crore (385,131,796) shares, or 2% of the base offer size, with an option to additionally sell 19.25 crore (192,565,898) shares, representing 1% of the total issued and paid-up equity share capital of the bank, IOB said in a regulatory filing.

Additionally, the bank may offer up to 150,000 equity shares (0.001% of its total paid-up equity capital) to eligible employees through the stock exchange, subject to regulatory approval. Eligible employees can apply for shares worth up to ₹5,00,000 each, the state-owned lender said.

The offer will be conducted at a floor price of ₹34 per equity share during trading hours on Wednesday. Orders can be placed on both the BSE and NSE, with Goldman Sachs (India) Securities Private Limited acting as the broker to the offer.

The shares will be allocated at or above the floor price based on price priority, following the OFS guidelines. However, retail investors can bid at the cut-off price, and their final allocation price may be lower than the floor price due to the retail discount, a statement from the lender said.

Indian Overseas Bank share price

At 10:15 AM, shares of Indian Overseas Bank were trading 3.64% lower on the National Stock Exchange (NSE) at ₹35.24 apiece.

Shares of the lender have lost over 12% in the last month, while they have slipped 7% in six months. Since the beginning of 2025, the stock has tumbled 32%. The firm has a market capitalisation of ₹67,860.22 crore.

Shares of the bank had touched their one-year high of ₹56.80 apiece on December 16, 2024, while their 52-week low of ₹33.50 was hit on April 7, 2025.

Indian Overseas Bank Q2 earnings

The public sector lender had reported a 58% year-on-year (YoY) increase in its standalone net profit to ₹1,226 crore for the quarter. In the corresponding period of the previous fiscal year, the bank had clocked a profit of ₹777 crore.

Its net interest income (NII) rose 20.53% YoY to ₹3,059 crore during the quarter under review, compared to ₹2,538 crore in the September quarter of FY25.

Furthermore, the Indian Overseas Bank’s domestic net interest margin (NIM) increased by 14 basis points (bps) YoY to 3.35% for Q2FY26, as against 3.21% as of September 30, 2025.

Its global NIM also expanded, rising 3.21% for the reporting quarter, marking a jump of 13 bps from 3.08% in the year-ago period.

The bank’s asset quality improves both YoY and on a quarter-on-quarter (QoQ) basis, as its gross non-performing assets (NPA) declined to 1.83% during the second quarter of FY26, as against 2.72% of total loans in the same quarter of FY25. Its GNPA stood at 1.97% in the previous quarter (Q1FY26).