Mumbai: Shares of Indian Overseas Bank (IOB) Tuesday rose by over 5 percent after its board approved raising of funds through a rights issue.
The scrip opened higher and continued the uptrend throughout the day before settling at Rs 90.05, up 5.14 percent on the BSE.
At National Stock Exchange, the scrip gained 5.08 percent to close at Rs 90.
Rally in the stock was in tandem with an overall strong stock market with the BSE benchmark Sensex ending up 154.10 points at 19,580.81 points.
The board of the bank at its meeting held on December 29, approved a rights issue of 20 crore equity shares of face value of Rs 10 each at a premium to be decided based on the market conditions, IOB said in a filing to the BSE Monday.
At Tuesday's closing price, the bank would raise about Rs 1,800 crore from the market.
Rights issue is offered to the existing shareholders of the bank. Government of India holds 69.62 percent stake in the Chennai-based bank.