IOB share price: Shares of Indian Overseas Bank (IOB) came under selling pressure on Wednesday, December 17, following the launch of its offer for sale (OFS) worth ₹1,960 by the government.
IOB OFS floor price is fixed at ₹34 per share, a discount of 7% as against its last closing price of ₹36.57 on the BSE. Following the OFS launch, IOB share price fell to the day’s low of ₹34.57, shedding 5.45%. The PSU stock was trading at ₹34.63 around 1.50 pm.
IOB OFS: Key details
Here are the key details about IOB OFS that the investors must know:
IOB OFS Size: The government is looking to sell up to 38.51 crore shares or 2% base offer size with an option to additionally sell 19.25 crore shares, representing 1% of the total issued and paid-up equity share capital of the bank, according to the exchange filing.
IOB OFS price: The PSU bank has fixed the OFS price at ₹34 apiece, which represents a 7% discount to the last closing price.
IOB OFS date: The OFS opened for subscription on Wednesday, December 17 and will close on Thursday, December 18. The OFS is available for institutional bidders today, while the retail bidding will open on Thursday.
Employee quota in OFS: Additionally, the bank stated that 1,50,000 shares (0.001% of the total issued and paid-up equity capital) may be offered to eligible employees under the OFS guidelines, as per the filing.
Should retail investors participate?
After Bank of Maharashtra, this is the second OFS by a PSU bank this month. Shares of IOB have fared poorly in the last one year, shedding 37% during this period.
Meanwhile, on a year-to-date (YTD) basis, the scrip is down 33%. In the last three-month period, too, the PSU stock has lost 15% of its value, suggesting weak investor confidence.
This is despite the PSU lender posting a strong turnaround in performance. H1 FY26 net profit rose 66% YoY to ₹2,337 crore, while Q2 FY26 profit increased by 58% YoY. Asset quality has normalised meaningfully, with GNPA at 1.83% and NNPA at 0.28%, among the best metrics within PSU banks. Capital adequacy remains comfortable at 17.94%, and ROE has improved to 20%, indicating efficient capital deployment.
However, on the valuation front, the stock trades at 1.94x earnings, which is at a premium to its PSU bank peers.
Against this backdrop, analysts believe that long-term investors can consider participating in the Indian Overseas Bank OFS, although they advise short-term investors to avoid.
G Chokkalingam, Founder, Equinomics Research, said that the valuation of 1.9x price to adjusted book value is slightly stretched as compared to other PSU banks; however quality of assets, solid credit growth and high level of exposure to low-cost deposits make this stock very attractive for the long term.
Abhinav Tiwari, Research Analyst at Bonanza, said that the persistent divergence between improving reported numbers and weak stock price action suggests the market remains cautious on the durability of earnings and execution.
He said that for retail investors, this OFS is not a compelling buy. While the floor price offers a modest discount and fundamentals have improved, weak momentum and earnings quality concerns limit near-term upside, he opined.
Therefore, his advice is that long-term value investors may participate with a small allocation. Conservative, while short-term investors should avoid and wait for clearer price and earnings confirmation, he added.
“The OFS floor price is set at ₹34, which is only about 3–4% below the current market price of ₹35.00– ₹35.40. This narrow arbitrage spread makes short-term trading or listing gains highly risky, especially given potential intraday volatility,” said Vinit Bolinjkar – Head of Research – Ventura, echoing similar views.
Given that there is limited upside, it is not an ideal opportunity for retail investors looking for quick gains, he said.
IOB shares: Technical outlook
Technically, IOB stock is currently in a correction phase, said Bolinjkar.
“The support levels are around ₹34- ₹34.50 (matching the OFS floor price), and any recovery will face resistance around ₹37- ₹39. If the stock can break past ₹40.50, that would be a bullish signal,” he said.
Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.
