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State-run Indian Overseas Bank Ltd. announced the closure of its Qualified Institutional Placement (QIP) on Monday, March 24, in an exchange filing.

The lender has raised a sum of ₹1,436 crore by selling 35.41 crore equity shares to eligible institutional buyers. The bank had approved a share sale initially to raise a sum up to ₹2,000 crore
Shares have been sold to eligible buyers at a price of ₹40.57 per share, which is a 5% discount to the floor price of the QIP of ₹42.7 per share and a 9% discount to the stock's closing price on Monday.

The base size of the QIP was ₹1,000 crore with an option to upsize it by another ₹1,000 crore. The lender had launched the institutional share sale last Thursday.
Most of the shares that were part of the QIP have been sold to India's largest insurance company, Life Insurance Corporation of India (LIC) and funds affiliated to it. Funds affiliated to India's largest fund house, SBI Mutual Fund, have also been issued shares. No major foreign fund house has been issued more than 5% of the QIP shares on offer, something that is generally disclosed to the exchanges.
Indian Overseas Bank is one among the five state-run lenders who have been mandated to bring down their government shareholding and be compliant with Minimum Public Shareholding (MPS) norms. At the end of the December quarter, the government had a 96.38% stake in the bank.

Based on the number of shares sold, the QIP could lead to a dilution of 1.87% of the total outstanding equity of the bank.

In-line with Indian Overseas Bank, other such state-run lenders like UCO Bank, Central Bank of India, Punjab & Sind Bank, have also launched their respective institutional share sales. All of these lenders have government shareholding in excess of 90%.

Shares of Indian Overseas Bank ended 2.25% higher on Monday at ₹44.54. The stock is down 41% from its recent 52-week high of ₹75.55.

 

 

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