So, you’re looking at the share price of iob and wondering if it’s finally time for this Chennai-based lender to break out of its shell. Honestly, I get it. For years, Indian Overseas Bank was basically the "problem child" of the public sector banking space. It was stuck in the Prompt Corrective Action (PCA) framework for what felt like an eternity, but lately, the vibe has shifted.
The stock is currently hovering around ₹36.08 as of mid-January 2026.
It's down about 10% over the last few months, and if you just look at the ticker, you might think the momentum has fizzled out. But that’s a rookie mistake. To understand where the share price of iob is actually going, you have to look at the massive cleanup job the management has been doing behind the scenes. We're talking about a bank that just reported a record quarterly net profit of ₹1,365 crore in Q3 FY26. That is a massive 56.2% jump compared to last year.
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The asset quality turnaround is real
For a long time, the biggest drag on the share price of iob was the mountain of bad loans. It was scary. But look at the numbers now. The Gross Non-Performing Assets (GNPA) have plummeted to 1.54%. Compare that to where it was a couple of years ago when it was well over 10%.
Even more impressive? The Net NPA is sitting at a tiny 0.24%.
Basically, IOB has cleaned up its balance sheet to the point where it’s actually outperforming some of its larger peers in terms of asset quality. This isn't just luck; it's a strategic shift toward retail, agriculture, and MSME loans. They’re sorta moving away from the risky, massive corporate loans that got them into trouble in the first place.
- Retail and MSME Focus: Management is betting on smaller, more granular loans.
- Digital Push: Nearly 98% of their transactions are now digital. That saves a ton of money on operational costs.
- Provisioning Buffer: They’ve already started building a ₹1,500 crore buffer for Expected Credit Loss (ECL) norms coming in 2027.
The privatization and stake dilution puzzle
Here is what most people miss when discussing the share price of iob. The Government of India still owns a massive chunk of this bank—about 92.44% to be exact. According to SEBI rules, every listed company needs at least 25% public shareholding.
IOB is nowhere near that.
They have a deadline of August 1, 2026, to fix this. To get there, the bank is planning to raise ₹4,000 crore through a Qualified Institutional Placement (QIP) likely in Q4 of this fiscal year. MD & CEO Ajay Kumar Srivastava has already admitted that even after this QIP, they might only dilute the government's stake by 4%.
This means a massive supply of shares is coming to the market eventually. When there’s an "overhang" of shares like this, it often puts a ceiling on how high the stock can fly in the short term. Investors are worried that the government will keep selling, which "sorta" keeps the price suppressed even when the fundamentals are screaming "buy."
Why the market is still hesitant
If the profits are so good, why isn't the share price of iob back at its 52-week high of ₹54.54?
Well, the market is a bit of a skeptic. While the bank is making record profits, its Net Interest Margin (NIM) is around 3.42%. That’s healthy, but with the RBI keeping a close watch on liquidity, maintaining these margins is going to be a dogfight.
Also, credit growth for IOB is currently around 24% year-on-year, but most of that is coming from the RAM (Retail, Agri, MSME) sector. Corporate loan growth is still in the single digits. Some analysts, like those at Sharekhan, have maintained cautious targets because they want to see if this growth is sustainable once the interest rate cycle fully turns.
Actionable insights for your portfolio
Don't just chase the hype. If you're looking at the share price of iob, you need a game plan that accounts for the volatility of PSU stocks.
- Watch the QIP Pricing: When the bank announces the floor price for its ₹4,000 crore fundraising, that will be a huge signal. If institutional investors (like big mutual funds or insurance companies) jump in aggressively, it's a massive vote of confidence.
- Monitor the 25% Deadline: Expect some noise around August 2026. If the government seeks an extension from SEBI, the stock might breathe a sigh of relief. If they rush an Offer for Sale (OFS), expect a temporary price dip.
- Dividend Potential: Management has hinted that they might finally be in a position to declare dividends in the next financial year. For a stock trading under ₹40, a decent dividend yield could be the catalyst that attracts long-term "value" seekers.
Honestly, IOB isn't the same bank it was in 2018. It’s leaner, more digital, and significantly more profitable. But the road to ₹50 and beyond is paved with regulatory hurdles and government stake sales. Keep an eye on the quarterly slippages; as long as those stay low, the floor for the share price of iob seems fairly solid.