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IOB Raises Rs 1,000 Crore via Basel III Compliant Tier II Bonds at 7.80% Coupon
Indian Overseas Bank (IOB) has successfully raised Rs 1,000 crore through the private placement of Basel III compliant Tier II bonds. The issue consisted of a base size of Rs 500 crore and a green-shoe option of Rs 500 crore, both of which were fully exercised. These unsecured, non-convertible bonds carry a coupon rate of 7.80% per annum and were allotted to 15 investors. This capital infusion will help the bank strengthen its Tier II capital base and improve its overall Capital Adequacy Ratio (CAR).
Key Highlights
Total capital raised amounts to Rs 1,000 crore through Series VI Tier II bonds
Coupon rate set at 7.80% per annum for the unsecured, taxable bonds
Issue included a base size of Rs 500 crore and a green-shoe option of Rs 500 crore
Bonds were allotted to 15 allottees on January 23, 2026, on a private placement basis
Listing permission from BSE for the bonds was received on January 27, 2026
💼 Action for Investors
This fundraise is a positive step for IOB as it strengthens its capital buffer to support future lending growth. Investors should monitor the bank's upcoming quarterly results to see the impact on its Capital Adequacy Ratio and credit expansion.