Mumbai: Three public sector banks - Indian Overseas Bank (IOB), Punjab & Sind Bank and Central Bank of India - are preparing to raise fresh equity capital to reduce government ownership and comply with the Securities and Exchange Board of India's (Sebi) minimum public shareholding requirements, according to a PTI report.
While IOB has indicated a tentative fundraising timeline, the other two lenders are still evaluating market conditions before finalising their plans.
IOB Targets Rs 5,000 Crore
Indian Overseas Bank has received approval to raise up to Rs 5,000 crore through a qualified institutional placement (QIP) during FY27.
IOB Managing Director and CEO Ajay Kumar Srivastava told PTI that the bank has secured almost all necessary clearances.
The lender expects to launch the issue towards the end of the December quarter or early in the March quarter, depending on market conditions.
If the entire amount is raised, government ownership could decline from 92.44% to approximately 86%, reflecting an estimated dilution of around six percentage points.
Punjab & Sind Bank Plans QIP
Punjab & Sind Bank is also exploring institutional fundraising to strengthen its capital position and increase public shareholding.
According to the PTI report, the bank has secured necessary approvals, appointed merchant bankers and initiated discussions with potential investors.
Managing Director and CEO Swarup Kumar Saha indicated that QIP remains the preferred fundraising route, although the timing has not been finalised.
Central Bank Eyes Rs 7,000 Crore
Central Bank of India has received shareholder approval to raise up to Rs 7,000 crore through various routes, including QIP, follow-on public offers and rights issues.
The bank is assessing market conditions before deciding its fundraising strategy.
Under Sebi regulations, listed companies must maintain at least 25% public shareholding.
Fresh equity issuances would help these lenders reduce government ownership while strengthening their capital base to support future business expansion.
However, the proposed fundraising plans remain subject to market conditions and institutional investor demand.
