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Disinvestment in Bank: The government has decided to reduce its stake in the public sector bank Indian Overseas Bank. Under this, about 3 percent stake in the bank is to be sold today i.e. on 17th December.
New Delhi. The government has decided to sell up to 3 percent stake in the public sector Indian Overseas Bank (IOB). Preparations are on to make this sale through open for sale. This process of disinvestment will start from Wednesday 17th December. It is believed that from this sale, the government is expected to get around Rs 2,100 crore from the current stock market of the company.
In the stock market on Tuesday i.e. December 16, the price of IOB shares was down by 1.08 percent at Rs 36.57. IOB informed the stock market on Tuesday that the government will sell 38.51 crore shares equivalent to 2 percent stake under the original offer. Apart from this, the option to sell 19.25 crore shares equivalent to additional one per cent stake has also been kept under ‘Green Shoe’ option i.e. keeping it in case of additional bid. Overall this will be 3 percent of the paid-up equity capital of the bank.
Who can buy stake
Department of Investment and Public Asset Management (DIPAM) Secretary Arunish Chawla said on social media platform ‘X’ that IOB’s OFS will open for non-retail investors on Wednesday, while retail investors will be able to place bids on Thursday. At present the government’s stake in Chennai-based Indian Overseas Bank is 94.61 percent. This means that after selling the stake, the government’s stake in this bank will reach around 91.61 percent.
Bank employees will also get a chance
The bank also said that under OFS, 1.5 lakh shares (about 0.001 percent stake) can be reserved for eligible employees. Eligible employees will be able to apply for shares up to a maximum of Rs 5 lakh subject to the approval of the competent authority. This disinvestment is in accordance with the minimum public shareholding rules, under which it is mandatory for the general public to hold at least 25 percent stake in listed companies.
Ready to sell stake in more banks
Capital market regulator SEBI has given exemption till August 2026 to Central Public Sector Undertakings and Public Sector Financial Institutions to comply with this rule. Apart from IOB, the government’s stake in Punjab and Sindh Bank, UCO Bank and Central Bank of India also exceeds the prescribed limit. Therefore, under SEBI rules, the government will have to reduce its stake in these banks also and 25 percent of it will be held by common investors.
