13 Apr , 2021 By : Kanchan Joshi
MUMBAI: Shares of Indian Overseas Bank gained as much as 9.32% on Tuesday after the board of the bank approved issuing equity shares to the government on preferential basis for the capital infusion of Rs4,100 crore received during fiscal year 2020-21.
At 11:35 am, the stock was trading at Rs16.60 up 3.11% from its previous close, while the benchmark index, Sensex gained 0.25% to 48,003.88.
The bank in its extraordinary general meeting (EGM) of shareholders to be held on 12 May will take shareholders' approval to issue 24.65 million equity shares at Rs16.63 each to the Government of India on preferential basis.
In September, as a part of the first batch of supplementary demand for grants for 2020-21, Parliament in the monsoon session gave approval for infusing Rs20,000 crore in public sector banks (PSBs) in the current financial year to meet regulatory requirements. In 2019-20, the government made capital infusion of Rs70,000 crore into PSBs. Of this, IOB got Rs4,360 crore.
In November, Indian Overseas Bank (IOB) had sought a capital support of about Rs1,000 crore from the government in order to create buffer for any exigency.
The public sector bank posted a net profit of Rs212.87 crore for the quarter ended 31 December 2020 against net loss of Rs6,075.49 crore for the corresponding quarter last year. Total income jumped 11.3% to Rs5,786.54 crore in December 2020 quarter from Rs5,197.94 crore in the same quarter last year.
According to the latest shareholding pattern, Government of India held 95.84% stake in the bank.
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