Public sector lender Indian Overseas Bank (IOB) has announced plans to raise Rs. 4,000 crore during the current financial year through a combination of financial instruments, with a major portion expected via Qualified Institutional Placement (QIP). This was disclosed by the bank’s Managing Director and CEO, Mr. Ajay Kumar Srivastava, during a press briefing on Friday.
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Mr. Srivastava noted that the fundraising exercise is expected to reduce the Government of India’s shareholding in the bank from 94 percent to 90 percent. “Last year, we raised about Rs. 1,440 crore in March. This year, we are targeting around Rs. 4,000 crore. For this, we are in discussions with various authorities for the necessary approvals,” he said.
When asked about the timeline for the capital infusion, Mr. Srivastava indicated that the fundraising is expected to materialize by the end of the third or fourth quarter of the current fiscal year.
Strong Financial Performance in Q1 FY26
IOB posted robust financial results for the April–June quarter of the financial year 2025–26, registering a 76 percent year-on-year jump in net profit. The net profit rose to Rs. 1,111 crore compared to Rs. 633 crore in the corresponding period last year.
“This is the highest-ever net profit declared by the bank,” said Mr. Srivastava. The bank’s total income for the quarter rose to Rs. 8,866 crore from Rs. 7,568 crore in the same period last year.
Operating profit also recorded significant growth, increasing by 40.70 percent to Rs. 2,358 crore on a year-on-year basis.
Key Growth Drivers Identified
Explaining the factors behind the strong financial performance, Mr. Srivastava pointed to multiple contributors: “Our primary driver has been interest income, owing to quality lending at healthy rates. The net interest income has gone up, and we’ve effectively controlled our expenses.”
He further added that improved other income and reduced provisioning requirements also played a crucial role in driving up net profits. “All these factors together have led to a 75 percent increase in net profit,” Mr. Srivastava said.
Outlook Positive as Bank Strengthens Capital Base
With a strong first quarter performance and a capital-raising plan in motion, Indian Overseas Bank is poised to strengthen its financial position and further reduce the government’s stake, moving toward greater market participation and operational flexibility.
About Indian Overseas Bank
Indian Overseas Bank (IOB) is a premier public sector bank headquartered in Chennai, India. Established in 1937, it operates with a strong global presence, offering a wide range of banking services, including retail, corporate, and NRI banking. Known for its customer-centric approach, IOB plays a vital role in India’s financial growth and international banking operations.
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