IOB receives shareholders nod for Rs 3,806 crore capital infusion

Chennai: Public sector Indian Overseas Bank Thursday said its shareholders have approved the special resolution to issue equity shares towards capital infusion of Rs 3,806 crore from the Government of India.

According to the bank's Managing Director and CEO, R Subramaniakumar the capital infusion would help the bank shore up its capital adequacy requirements and enable the bank build a robust loan book.

"The shareholders of Indian Overseas Bank at the Extra Ordinary General Meeting held on March 28, have 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.

Following the approval, the bank has issued and allotted the shares to the government, it said.

Subramaniakumar said following the initiatives taken by the Bank for turnaround, there was visible improvement on its performance in the third quarter results.

Indian Overseas Bank recorded a net loss of Rs 346 crore for the quarter ending December 31, 2018. It was down 64 percent from Rs 971 crore in the year ago period.

The bank in January added Rs 261 crore to its share capital under the Employee Stock Purchase Scheme. The Scheme met with success of 92 percent participation by employees resulting in oversubscription.

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