Indian Overseas Bank plans to raise funds through FPO in next fiscal

PTI, Feb 17, 2020, 5:22 PM IST

Hyderabad: Indian Overseas Bank (IOB), which has been in the red for the last four-and-a-half years, is mulling to raise funds through a Follow-on Public Offering (FPO) next year, a senior official of the state-owned lender said here on Monday.

Ajay Kumar Srivastava, Executive Director IOB, said that the FPO idea was still “at the drawing board level” and the Board would take a decision on the quantum of funds to be raised and the percentage of stake to be diluted.

The centre holds nearly 95 per cent stake while LIC has three per cent and others-two per cent in the bank, which is currently under the Prompt Corrective Action (PCA) framework of the Reserve Bank.

“Raising money from the public is on the cards. We plan to do it in the second or third quarter. We will go to the market with FPO. First, we have to go to our Board, we have to go to RBI and SEBI also (for necessary approvals). It is on the drawing board, but nothing has been concretised. But it is in our action for next year,” he told reporters at a press conference here.

The centre recently increased IOB’s authorized capital from Rs 10,000 crore to Rs 25,000 crore.

The Government also infused Rs 4,360 crore capital into the bank.

He said the Chennai-based lender is in the process of improving its performance in terms of controlling Non-performing Assets (NPA) and Net Interest Margin (NIM).

The banks NIM is currently at about 1.94 per cent and is expected to touch two per cent during the current quarter.

“It would take another three of four quarters to touch the three per cent-NIM… We will prefer to go for FPO after we come out of PCA,” he said.

The Reserve Bank of India’s PCA framework, which intends to nurse financially weak banks back to health, restricts lending and expansion of lenders.

Srivastava said going forward the focus of the credit would more for MSMEs and wants to be recognized as “MSME-focused bank.”

He said currently the exposure to the sector is Rs 31,000 crore and efforts are on to take it Rs 50,000 crore in the next 18-24 months.

IOB also classified 200 of its branches as “MSME- focused.”

Udayavani is now on Telegram. Click here to join our channel and stay updated with the latest news.

Top News

Medical officer sexual harassment case: Dr Ratnakar granted bail

Police have obligation to act with empathy: Kerala HC

257 new COVID-19 cases, five deaths in Karnataka

Mass marriages rule out dowry and child weddings: CM

8.55 crore rural households have provision of tap water supply at home: Jal Shakti Ministry

Phenomenal achievement, says Dravid of Ashwin’s feat

‘Passed without discussion, repealed without discussion’: Omar’s jibe over farm laws

Related Articles More

RBI supersedes board of Reliance Capital; appoints administrator

Gold climbs Rs 242; silver zooms Rs 543

Sensex, Nifty pare losses in choppy trade; Reliance, TCS advance

Why investors kept on funding Zomato even after no profit for years?

Jio announces up to 21% hike in tariffs from Dec 1


‘Car’bar with Merwyn Shirva | Episode 1

NEWS BULLETIN 29-11-2021

Andhra Pradesh Primary school students go to police station for complaint against friend for pencil problem video goes viral in social media

Building Demolition work yet not start in Dandeli

Lawyers Protest against Corruption at Registration office Humnabad

Latest Additions

Pankaj survives; Amee, Ishika sail into second round

HAL to manufacture first four LUHs by 2022-23: Govt

Medical officer sexual harassment case: Dr Ratnakar granted bail

Salman Khan visits Sabarmati Ashram, tries his hands on ‘charkha’

Police have obligation to act with empathy: Kerala HC

Thanks for visiting Udayavani

You seem to have an Ad Blocker on.
To continue reading, please turn it off or whitelist Udayavani.