Indian Overseas Bank (IOB) raised Rs 500 crore through sale of Basel-III compliant Tier-2 bonds via private placement, the state-run lender said in a statement.
"The funds will be used to meet the growth requirements of the bank apart from meeting the regulatory requirements," Radha Venkatakrishnan, General Manager and CFO, IOB said.
The base size of the issue was Rs 500 crore, with greenshoe option of Rs 300 crore. IOB said that it received bids for Rs 855 crore but decided to accept bids for a Rs 500 crore base size.
In May, its board had approved of the bank’s capital raising plan for the current financial year. It included issuance of Tier-2 bonds up to a maximum of Rs 1,500 crore.
As on June 2019, the bank's capital adequacy ratio was at 10.02 percent, with Tier-2 at 2.4 percent. As per regulatory norms, banks are required to maintain minimum capital adequacy at 9 percent.
IOB is one of the four lenders that are still under RBI's Prompt Corrective Action (PCA) framework. It hopes to exit the PCA by end of current financial year.
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