Indian Overseas Bank slips 5% as govt launches up to 3% stake sale via OFS

Government proposes to sell up to 38,51,31,796 shares or 2 per cent of equity on December 17, 2025, for non-retail investors and on December 18, 2025, for retail investors, under the 'Base offer'.

Indian Overseas Bank shares slipped 5.4 per cent on the BSE, logging an intra-day low at ₹34.57 per share. The selling pressure came after the government proposed to sell up to 3 per cent equity of the company through offer for sale (OFS).

 

At 1:07 PM, Indian Overseas Bank’s share price was trading 5.09 per cent lower at ₹34.71 per share on BSE. In comparison, the BSE Sensex was up 0.23 per cent at 84,486.6.

 

The company has a total market capitalisation of ₹66,839.62 crore. Its 52-week high was at ₹56.05, and its 52-week low was at ₹33.01.  

 

According to the filing, the promoter (governenment) proposes to sell up to 38,51,31,796 shares or 2 per cent of equity on December 17, 2025, for non-retail investors and on December 18, 2025, for retail investors, under the ‘Base offer’. 

 

The promoter has offered to sell an additional 1 per cent equity under the ‘oversubscription’ option. 

 

“The Promoter proposes to sell up to 38,51,31,796 Equity Shares of the Bank, (representing 2 per cent of the total issued and paid up equity share capital of the Bank) (“Base Offer Size”), on December 17, 2025, (“T day") (for non-Retail Investors (as defined below) only) and on December 18, 2025 (“T+1 day") (for Retail Investors, Employees (as defined below) and for non-Retail Investors who choose to carry forward their un-allotted bids from T day) with an option to additionally sell 19,25,65,898 Equity Shares (representing 1 per cent of the total issued and paid up equity share capital of the Bank) (the "Oversubscription Option") through a separate, designated window of the BSE Limited (the "BSE") and the National Stock Exchange of India Limited (“NSE", and together with the BSE, the “Stock Exchanges"), collectively representing 3 per cent of the total issued and paid up equity share capital of the Bank (held in dematerialised form in one or more demat accounts with the relevant depository participant), in accordance with the OFS Guidelines (such offer for sale hereinafter referred to as the "Offer"),” the filing read. 

 

As part of the OFS, up to 150,000 shares, representing 0.001 per cent of the bank’s equity, may be reserved for eligible employees, subject to approvals. The bank said employees can apply for shares worth up to ₹5 lakh.

 

The stake sale is aligned with the Securities and Exchange Board of India (Sebi) norms that mandate all listed companies, including those in the public sector, to maintain a minimum public shareholding of 25 per cent. The deadline for compliance has been set at August 2026. The government currently owns 94.61 per cent of the Chennai-headquartered lender.

 

The sale comes nearly two weeks after the Centre offloaded a 6 per cent stake in Bank of Maharashtra, reducing its shareholding in the lender to below 75 per cent. Besides Indian Overseas Bank, the government’s shareholding remains above the mandated threshold in Punjab & Sind Bank (93.9 per cent), UCO Bank (91 per cent), and Central Bank of India (89.3 per cent).