Indian Overseas Bank OFS floor price is 15% lower than its QIP price; Stock falls

Shares of Indian Overseas Bank Ltd. fell over 4.5% on Wednesday, December 17, after the government launched an Offer For Sale (OFS) to pare some stake in the lender.

The OFS has opened for non-retail investors today, and will open for retail investors on Thursday, December 18.

This is the third straight day of losses for the state-run lender.

The government plans to sell up to 2% of IOB's outstanding equity through the Offer for Sale, with a greenshoe option of an additional 1%.

Floor price of the OFS has been fixed as ₹34 per share, which was a 4.4% discount to the stock's closing price on Tuesday.

The floor price is 16% lower than the ₹40.57 level, which is the rate at which Indian Overseas Bank had issued shares to eligible investors as part of its Qualified Institutional Placement (QIP).

Indian Overseas Bank had raised ₹1,436 crore in March this year, by issuing 35.41 crore shares to eligible buyers. LIC was issued 34.8% of the overall QIP shares, followed by IIFL Finance, who was issued nearly 14% of the shares. SBI Pension Fund, and LIC Pension Fund were also issued 7% each of the QIP share offering.

As of the September quarter, the government still owns over 94% stake in Indian Overseas Bank.

Shares of Indian Overseas Bank are trading 4.3% lower on Wednesday at ₹34.99. The stock is down nearly 60% from its February 2024 peak of ₹83.8. The stock is down 32% so far in 2025, which will be the first year of negative returns for the stock after 2020.