Indian Overseas Bank's offer for sale (OFS) opened for subscription on Wednesday for non-retail investors at a floor price of ₹34 per share. The government will raise ₹1,960 crore by selling a 3 percent stake.

The government will sell its stake in Indian Overseas Bank; the OFS opened at Rs 34 on the trading day.

Indian Overseas Bank OFS: Indian Overseas Bank's offer for sale (OFS) opened for subscription on Wednesday for non-retail investors at a floor price of Rs 34 per share. The government has decided to divest up to 3 percent of its stake in the public sector Indian Overseas Bank (IOB) through an offer for sale (OFS).

What is the government's plan?

The government will raise approximately ₹1,960 crore by selling a three percent stake at a floor price. According to the share sale details, the offer for sale for retail investors will open on Thursday. The floor price for the Indian Overseas Bank (IOB) OFS has been set at ₹34 per share.

IOB shares closed down 1.08 percent at ₹36.57 on the BSE on Tuesday. In a filing to the stock exchange, IOB said the government would sell 385.1 million shares, equivalent to a 2 percent stake, under the original offer. 

Additionally, a "green shoe" option, i.e., the option to sell up to 192.5 million shares, equivalent to an additional one percent stake, has been retained. This represents three percent of the bank's paid-up equity capital. Currently, the government holds a 94.61 percent stake in Chennai-based Indian Overseas Bank. 

Information provided by the bank

The bank also stated that up to 1.5 lakh shares (approximately 0.001 percent of the stake) may be reserved for eligible employees under the OFS. Eligible employees will be able to apply for shares worth up to a maximum of Rs 5 lakh, subject to approval by the competent authority. This disinvestment is in accordance with the minimum public shareholding regulations, which require the public to hold at least 25 percent of the shares in listed companies. 

Capital markets regulator SEBI has granted central public sector undertakings and public sector financial institutions until August 2026 to comply with this requirement. Besides IOB, the government's stake in Punjab & Sind Bank (93.9 percent), UCO Bank (91 percent), and Central Bank of India (89.3 percent) also exceeds the prescribed limit.