IOB May Miss August Public Shareholding Deadline, Seeks Extension: CEO Ajay Srivastava

Indian Overseas Bank (IOB) may fall short of meeting the minimum public shareholding (MPS) requirement by August 1, 2026, as per The Moneycontrol report.  

The bank is aiming to reduce government ownership through a ₹4,000 crore Qualified Institutional Placement (QIP), but this alone may not help reach the mandated 25% threshold. 

25% MPS Regulatory Deadline May Be Missed Despite QIP Issue 

Ajay Kumar Srivastava, Managing Director and CEO of IOB, confirmed that the ₹4,000 crore QIP planned for Q4 FY26 is expected to dilute the government’s current 90% stake by only 4%. 

Even after this dilution, the bank would remain non-compliant with the MPS norms set by the Securities and Exchange Board of India (SEBI), which mandates at least 25% public shareholding. The lender may request an extension from the government. 

Bank Reports Highest-Ever Quarterly Profit at ₹1,365 Crore 

In Q3 FY26, IOB reported a record profit of ₹1,365 crore, surpassing its previous quarterly best of ₹1,226 crore. This performance was achieved even after accounting for ₹1,500 crore in Expected Credit Loss (ECL) provisioning, which was implemented for the first time. Without this provision, the profit would have been approximately ₹2,800 crore to ₹2,900 crore. 

Gross NPA Ratio Drops to Around 1% 

Gross non-performing assets (NPAs) reduced to nearly 1%, attributed to increased recoveries and credit growth. The bank has adopted multiple recovery mechanisms such as asset sales, upgradations, and legal routes. Additionally, 323 MSME and small-value accounts were transferred to Asset Reconstruction Companies in the quarter. 

Read More: Indian Overseas Bank Q3 FY26 Earnings Results: Profit Jumps 56% to ₹1,365 Crore! 

CASA Growth and Deposit Challenges 

The current account savings account (CASA) ratio remained stable at 40% to 41%. Although savings deposits saw year-on-year growth of about ₹10,000 crore, the rise in retail term deposits impacted the CASA ratio percentage. Overall deposit growth continues to lag credit growth, which poses funding challenges amidst rising credit demand. 

Net Interest Margins and Participation in OMO 

Despite rate cuts from the RBI, IOB’s net interest margin is expected to remain at 3.3% to 3.4%. The bank participated in all 3 tranches of RBI’s Open Market Operations worth ₹1,495 crore, although no allocation was received due to market undercutting. 

Indian Overseas Bank Share Price Performance  

As of January 16, 2026, at 3:30 PM, Indian Overseas Bank share price on NSE was trading at ₹36.08 down by 0.08% from the previous closing price. 

Conclusion 

Indian Overseas Bank plans to raise ₹4,000 crore via QIP to dilute government shareholding. However, it may still not meet the 25% minimum public shareholding deadline by August 1, 2026, and could seek additional time from authorities. 

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