Chennai: Shareholders of Indian Overseas Bank (IOB) have approved the special resolution to issue equity shares towards capital infusion of ₹3,806 crore from the Government of India, the public sector bank said on Thursday.
According to IOB's managing director and chief executive, 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 ₹14.12 per equity share (including premium of ₹4.12 per equity share) on preferential basis to Government of India for the capital infusion of ₹3,806 crore received from the Government in February 2019," a bank statement said.
Following the approval, IOB has issued and allotted the shares to the government.
Subramaniakumar said following the initiatives taken by IOB for turnaround, there was visible improvement on its performance in the third quarter results.
Indian Overseas Bank recorded a net loss of ₹346 crore for the quarter ending 31 December 2018. It was down 64% from ₹971 crore in the year-ago period.
The bank in January added ₹261 crore to its share capital under the Employee Stock Purchase Scheme (ESOPs). The Scheme met with success of 92% participation by employees resulting in oversubscription.
On Thursday, IOB shares rose 3.62% to ₹14.30 apiece on the BSE while the benchmark Sensex gained 1.08% to end the day at 38,545.72 points.