Indian Overseas Bank Gets SEBI Approval to Issue 10 Crore Shares to Employees

Indian Overseas Bank has received approval from the Securities and Exchange Board of India to issue up to 10 crore fresh equity shares to eligible employees under an Employee Stock Purchase Scheme, a step toward meeting Minimum Public Shareholding norms. ScanX reported the approval, which was conveyed in a letter dated October 19, 2026.

Indian Overseas Bank's Employee Share Plan

The regulatory nod permits the bank to use the Employee Stock Purchase Scheme as a permissible mode for achieving compliance with MPS norms under Rule 19A of the Securities Contracts Regulation (Rules), 1957. The scheme operates in accordance with the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021.

The approval is specific to Indian Overseas Bank's current situation and is not treated as a precedent for other entities. The bank must ensure strict adherence to all applicable regulatory requirements during the execution of the scheme.

The issuance covers up to 10,00,00,000 fresh equity shares for eligible employees of the bank. The authorization addresses the public shareholding deficit without diluting promoter control through open market sales or rights issues to existing shareholders. SEBI's circular No. SEBI/HO/CFD/PoD2/P/CIR/2023/18 lists ESPS as a valid method for MPS compliance.

Indian Overseas Bank's Ownership and Profit Record

According to akta.pro company records, the Indian government is planning minority stake sales in Indian Overseas Bank as part of its ₹80,000 crore disinvestment target for FY27, with the Centre currently owning 96.5% in the bank. The same records show the bank's annual net profit for FY26 reached Rs 5,209 crore, up 56% from Rs 3,335 crore in FY25, crossing the Rs 5,000 crore mark for the first time. Annual operating profit for FY26 was Rs 10,026 crore, rising 15% year-on-year.

Lending Rate and Recruitment Moves

Indian Overseas Bank raised its MCLR by 5 basis points across six tenors effective October 15, 2026, with the one-month rate unchanged at 8.25%, CNBC TV18 reported. The bank also revised its one-year MCLR to 8.90%, effective October 15, 2026, according to ScanX.

Indian Overseas Bank and novio launched a co-branded RuPay credit card on September 16, available in Select and Platinum variants, CNBC TV18 reported. The bank opened applications for 291 Generalist and Specialist Officer posts, with the window running from August 29 to September 15, 2026, TimesNow reported.

What Comes Next for the Share Issuance

The bank must ensure strict adherence to all applicable regulatory requirements during the execution of the scheme, per the approval terms.