IOB eyes Rs 1,000 cr through issue of equity shares to govt

Indian Overseas Bank (IOB) is looking at raising around Rs 1,000 crore through issue of equity shares to the Government of India on a preferential basis.

“We have received letter from the government allotting around Rs 1000 crore. We are planning to restrict and manage within this limit. Right now we don't have plans to raise additional funds, we will see once if it is necessary,” said M Narendra, chairman and managing director of IOB.

The bank had earlier requested the government to allot around Rs 1,500 crore.

It informed the stock exchange that a Committee of Directors had fixed the price at Rs 78.68 per equity share including premium of Rs 68.68 per equity share. The issuance is subject to receipt of funds from Government of India and approval by shareholders at the EGM to be held on March 18, 2013, in Chennai.

On January 30, the bank had informed the exchanges that its board had given its nod to issue share of face value of Rs 10 with premium on a preferential basis to the Government of India and Life Insurance Corporation of India up to an amount of Rs 1,542 crore (including premium).

In the wake of the current allotment, the bank would not go for preferential issue to LIC at present, said Narendra.

With the allotment of shares, subject to the approvals, the Government of India’s share in the company is expected to go up from current around 69 per cent to around 73 per cent.