Pedestrians walk past vendors outside an Indian Overseas Bank branch in the BBD Bagh area of Kolkata, West Bengal, India (Photographer: Sanjit Das/Bloomberg)  

Indian Overseas Bank Gets Shareholders’ Nod For Rs 3,806-Crore Capital Infusion

The Indian Overseas Bank said its shareholders approved the special resolution to issue equity shares towards capital infusion of Rs 3,806 crore from the Government of India.

The capital infusion will help the bank shore up its capital adequacy requirements and enable the bank to build a robust loan book, according to Managing Director and Chief Executive Officer R Subramaniakumar.

"The shareholders of Indian Overseas Bank at the extra ordinary general meeting held on March 28 approved the special resolution to issue 269,54,67,422 equity shares at issue price of Rs 14.12 per equity share (including premium of Rs 4.12 per equity share) on preferential basis to Government of India for the capital infusion of Rs 3,806 crore received from the Government in February 2019," a bank statement said.

The bank issued and allotted the shares to the government, it said. Subramaniakumar said following the initiatives taken by the bank for the turnaround, there was visible improvement in its performance in the third quarter.

Indian Overseas Bank suffered a net loss of Rs 346 crore in the quarter ended Dec. 31, 2018. It was down 64 percent from Rs 971 crore in the year-ago period. In January, the bank added Rs 261 crore to its share capital under the Employee Stock Purchase Scheme. The scheme met success with a 92 percent participation by employees, resulting in over-subscription.

Shares of the bank ended at Rs 14.30 apiece, up by 3.62 percent over previous close on the stock exchanges.