Indian Overseas Bank to raise upto Rs 1,200 cr via QIP; stock up nearly 2%

MUMBAI: Shares of Indian Overseas Bank gained momentum after its board approved to raise Rs 1,200 crore by issuing shares to Qualified Institutional Buyers by way of Private Placement.

The bank has requested the government to provide a capital support of Rs 3,500 crore during the current fiscal.

"The bank has requested Government of India, Ministry of Finance, Department of Financial Services to infuse capital fund to meet Tier I Capital under Basel III norms to an extent of Rs 3,500 crore for the current financial year, 2014-15," IOB said in a BSE filing.

The capital requirement for the bank for 2014-15 is Rs 3,500 crore. The government infused Rs 14,000 crore in public sector banks during the current financial year ending March 31, 2014. Of this, the State Bank of India got Rs 2,000 crore while IDBI Bank received Rs 1,800 crore.

In view of the Basel III or global prudential banking norms, all banks have been planning to shore up their Tier I capital. According to the Reserve Bank, Indian lenders will require an additional capital of Rs 5 lakh crore to meet the new global banking norms - Basel III.

At 09:40 a.m.; the stock was at Rs 86.35, up 1.71 per cent, on the BSE. It touched a high of Rs 87 and a low of Rs 85.35 in trade today.