State-owned Indian Overseas Bank (IOB) today said that its board has given its approval for raising Rs 350 crore through Qualified Institutional Placement (QIP).
The board at its meeting held on December 14 cleared the proposal to raise up to Rs 350 crore through issue of shares on a preferential basis and/or QIP, IOB said in a filing to the BSE.
The fund raising should be to the extent so that the government holding is not diluted below 65 per cent.
This is over and above the original approval accorded by the board at its meeting held on November 11, 2013, to raise the capital to the extent of Rs 2,100 crore, the filing said.
QIP is a capital raising tool whereby a listed firm can issue equity shares, fully and partly convertible debentures, or other securities that are convertible to equity shares to institutional investors.
The Government will infuse about Rs 14,000 crore capital into 20 public sector banks in the current financial year. The capital infusion will ensure that banks have 8 per cent Tier-1 capital by the end of the current fiscal year.
The Government had infused Rs 20,117 crore in public sector banks during 2010-11 and Rs 12,000 crore in 2011-12.