Uco, 2 others likely to tap QIPs this year

Uco, Punjab & Sind, IOB to trim govt stake, meet Sebi rules

- Subhash Narayan & Rhik Kundu

Three state-owned banks may sell shares to financial institutions in the coming fiscal year to raise capital and increase public shareholding to the minimum levels set by the stock market regulator, two people aware of the discussions said.

The government owns over 95% in Uco Bank, Punjab & Sind Bank (PSB) and Indian Overseas Bank (IOB), with public investors holding the rest. India's minimum public shareholding (MPS) rules require all listed companies to have at least 25% public shareholding.

Depending on market conditions, the three banks may conduct several rounds of qualified institutional placements (QIPs) in FY26 as part of a phased approach to meeting regulatory requirements, the people said on the condition of anonymity.

"The government has allowed PSBs to explore equity dilution this year and time their market offers strategically. While the exact quantum will be determined closer to the offers, the stake sale is expected to range between 5% and 10% of paid-up equity capital this year, with further divestment staggered over the next few years," one of the two people cited above said on the condition of anonymity.