Government To Launch Indian Overseas Bank OFS Soon

Shares of Indian Overseas Bank could come into focus after the Centre decided to launch an Indian Overseas Bank offer for sale (OFS) as part of its plan to reduce its holding in state-owned lenders and meet minimum public shareholding norms.

According to official sources, the government currently owns 92.44% of the bank and is expected to launch the offer for sale soon to reduce its stake.

Why Is The Government Selling Its Stake?

The proposed government stock sell-off is a continuation of the disinvestment plan of the government. The aim is to expand public ownership in companies that have been listed as public sector enterprises while keeping majority control.

In December 2025, the government sold a 2.17% stake in Indian Overseas Bank through an OFS. The issue received a strong response from investors.

Which Banks Could Be Next?

Official sources say that the government is likely to carry out its programme of withdrawing from government-owned banks over the next few months.

Punjab & Sind Bank and UCO Bank, two of the major public sector banks of the country, may also be on the list for equity dilution. At the moment, the Government owns 93.85% in Punjab & Sind Bank and 90.95% in UCO Bank, which is much higher than the minimum public shareholding requirement that an exchange-listed company is required to maintain.

What Is The Government's Broader Plan?

The stake sales are part of the government's wider disinvestment programme to improve liquidity in state-owned companies while raising resources. The Department of Investment and Public Asset Management (DIPAM) has mobilised ₹20,272 crore through disinvestment in FY27 so far.

Separately, the government has set an asset monetisation target of ₹80,000 crore for the current financial year through strategic stake sales and the monetisation of public assets.

The planned OFS signals that the government intends to continue reducing its holdings in select state-owned banks to meet regulatory requirements.

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