The government will divest up to 3% stake in Indian Overseas Bank (IOB) through an offer for sale (OFS), which opens on 17 December.

At the current market price, the government will garner around Rs 2,100 crore from the stake sale.

IOB’s shares closed at Rs 36.57 apiece, down 1.08% on the BSE on Tuesday.

The floor price for the offer has been fixed at Rs 34 per equity share.

The government plans to sell up to 2% stake, or 38,51,31,796 equity shares. It has the option to sell an additional 1%, or 19,25,65,898 shares, via a green shoe option. The total offer size thus amounts to 57.77 crore equity shares, or 3% stake.

The offer will open on Wednesday for non-retail investors and on Thursday for retail investors, eligible employees and non-retail investors who choose to carry forward their unallotted bids.

Additionally, the bank said, 1,50,000 shares of the bank (equivalent to 0.001% of the total issued and paid up equity share capital of the bank) may be offered to eligible employees in accordance with the terms and conditions provided in the OFS Guidelines, subject to approval from the competent authority.

The eligible employees may apply for shares amounting up to Rs 500,000, it added.

This is in line with the Securities Contract (Regulation) Rules issued by the Securities and Exchange Board of India, which mandate that all listed companies, including those in the public sector, must have a minimum public shareholding of 25%.

The government currently holds a 94.61% stake in the Chennai-based bank.

Capital market regulator Sebi has given forbearance to CPSEs and public sector financial institutions till August 2026.

The other three lenders where the government stake exceeds the minimum public shareholding threshold are Punjab & Sind Bank (93.9%), UCO Bank (91%) and Central Bank of India (89.3%).