Indian Overseas Bank (IOB) is a public sector bank founded in 1937 and headquartered in Chennai. It was among the first 14 banks nationalized by the Government of India in 1969. With over 3,400 branches across India and a presence in more than 25 countries, IOB offers services across retail, corporate, treasury, and international banking segments. In recent years, the bank has shown marked improvement in asset quality, capital strength, and profitability—making it a topic of renewed interest among investors tracking PSU banking stocks. This article provides a realistic, data-backed outlook on the Indian Overseas Bank share price target 2026–2030, based on verified financials, sector trends, and growth fundamentals.
Indian Overseas Bank: Company Overview
- Founded: 1937
- Managing Director: Shri Ajay Kumar Srivastava
- NSE Symbol: IOB
- Business Segments: Retail Banking, Corporate/Wholesale Banking, Treasury, International Operations
- Market Position: Mid-sized public sector bank with strong regional presence and improving credit metrics
IOB has undergone significant balance sheet repair since FY2021, reducing gross NPAs and building capital buffers. Its CASA ratio has improved steadily, supporting lower funding costs—a key driver for net interest margin stability in a competitive banking environment.
Indian Overseas Bank: Key Financial Snapshot
| Metric | Value |
|---|---|
| Current Share Price | ₹35.45 |
| Market Capitalization | ₹68,283.87 Cr |
| No. of Shares Outstanding | 1,925.66 Cr |
| 52-Week High / Low | ₹53.70 / ₹33.00 |
| P/E Ratio (TTM) | 16.02 |
| P/B Ratio | 2.17 |
| EPS (TTM) | ₹2.21 |
| Book Value (TTM) | ₹16.34 |
| ROE | 12.26% |
| ROCE | 10.13% |
| Dividend Yield | 0.00% |
| Face Value | ₹10 |
| Net Interest Income | ₹10,890.21 Cr |
| Cost-to-Income Ratio | 47.14% |
| Capital Adequacy Ratio (CAR) | 19.74% |
| Profit Growth (YoY) | 25.57% |
| CASA % | 43.65% |
Indian Overseas Bank Share Price Target Forecast (2026–2030)
| Year | Target Price Range (₹) |
|---|---|
| 2026 | ₹38 – ₹44 |
| 2027 | ₹42 – ₹49 |
| 2028 | ₹46 – ₹55 |
| 2029 | ₹50 – ₹61 |
| 2030 | ₹54 – ₹68 |
Indian Overseas Bank Share Price Target 2026
| Year | Share Price Target 1 | Share Price Target 2 |
|---|---|---|
| 2026 | ₹38 | ₹44 |
IOB reported 25.57% YoY profit growth in FY2025, supported by strong loan recovery and lower provisioning. With a healthy CAR of 19.74% and CASA at 43.65%, the bank is well-positioned for credit expansion. However, its P/E of 16x is slightly above the PSU banking average, reflecting recent optimism. Given modest earnings scale (EPS: ₹2.21), near-term upside is limited unless efficiency improves further. A 2026 target of ₹38–₹44 assumes stable macro conditions and no major slippage.
Indian Overseas Bank Share Price Target 2027
| Year | Share Price Target 1 | Share Price Target 2 |
|---|---|---|
| 2027 | ₹42 | ₹49 |
If IOB sustains its cost-to-income ratio below 48% and continues to grow retail advances, profitability could improve. The bank’s high promoter holding (92.44%) ensures policy continuity but limits free float liquidity. Assuming EPS grows to ₹2.50–₹2.80 by FY27 and P/E stabilizes at 15–17x, the 2027 range of ₹42–₹49 is reasonable.
Indian Overseas Bank Share Price Target 2028
| Year | Share Price Target 1 | Share Price Target 2 |
|---|---|---|
| 2028 | ₹46 | ₹55 |
By 2028, benefits from digital initiatives and branch rationalization may reduce operating costs. However, IOB’s lack of dividend payouts (0% yield for several years) limits appeal for income-focused investors. If ROE holds above 12% and asset quality remains stable, investor sentiment could gradually improve. A P/E of 16–18x on projected EPS of ₹2.90–₹3.10 supports the ₹46–₹55 band.
Indian Overseas Bank Share Price Target 2029
| Year | Share Price Target 1 | Share Price Target 2 |
|---|---|---|
| 2029 | ₹50 | ₹61 |
Long-term growth depends on IOB’s ability to compete with larger PSUs like SBI and Bank of Baroda in retail and MSME lending. While its international operations offer diversification, they also add complexity. Assuming moderate loan growth (10–12% CAGR) and controlled NPAs, EPS could reach ₹3.20–₹3.40 by FY29. At a 16–18x P/E, the 2029 target is ₹50–₹61.
Indian Overseas Bank Share Price Target 2030
| Year | Share Price Target 1 | Share Price Target 2 |
|---|---|---|
| 2030 | ₹54 | ₹68 |
Over a five-year horizon, IOB’s valuation remains anchored by its small earnings base and absence of dividends. However, its strong capital position and improving operational metrics provide a safety net. If the bank begins rewarding shareholders or shows consistent ROE above 13%, re-rating potential exists. A terminal P/E of 17–20x on FY30 EPS (~₹3.20–₹3.40) justifies the ₹54–₹68 range.
Indian Overseas Bank: Shareholding Pattern
| Category | Holding (%) |
|---|---|
| Promoters (Government of India) | 92.44% |
| Domestic Institutional Investors (DII) | 4.27% |
| Foreign Institutional Investors (FII) | 0.35% |
| Public & Others | 2.94% |
The extremely high promoter stake reflects full government control—a hallmark of legacy PSU banks. Low institutional ownership indicates limited analyst coverage and trading liquidity.
Indian Overseas Bank: Strengths vs Risks
Strengths:
- Strong capital buffer (CAR: 19.74%), well above RBI’s 11.5% requirement
- Healthy CASA ratio (43.65%) supports low-cost deposits
- 5-year profit CAGR of 19% and consistent ROE improvement (12.26% in FY25)
- Contingent liabilities, while large (₹1.76 lakh Cr), are typical for PSU banks
Risks:
- No dividend payout since FY2014 (0% yield)—limits income appeal
- Low absolute earnings (EPS: ₹2.21) restrict valuation upside
- High promoter holding reduces market float and liquidity
- Vulnerable to interest rate volatility and regional economic slowdowns
Investment Suitability
| Factor | Assessment |
|---|---|
| Risk Profile | Moderate to High |
| Ideal Time Horizon | 3–5+ years |
| Volatility | Higher than large-cap PSU peers |
| Dividend/Income Potential | None (0% yield) |
| Best For | Investors seeking turnaround stories in PSU banking with high risk tolerance |
FAQs
Is it good to invest in the Indian Overseas Bank?
IOB shows improved fundamentals but lacks dividends and has low earnings per share. It may suit long-term investors betting on PSU banking recovery—but only as a small, tactical allocation due to limited upside and high government control.
Why are IOB shares falling?
Recent underperformance (e.g., -34% stock return in 1 year) stems from profit-taking after a sharp rally, lack of dividends, and concerns about scalability compared to larger peers like SBI or PNB.
Is IOB a large-cap company?
No. With a market cap of ~₹68,284 Cr, IOB is classified as a mid-cap stock under SEBI guidelines (large-cap threshold: top 100 companies by market cap).
Which is better, IOB or SBI?
SBI offers greater scale, international presence, consistent dividends, and higher liquidity. IOB has a stronger CASA ratio and lower NPA trajectory but lacks SBI’s brand strength and earnings power. SBI is generally preferred for core banking exposure; IOB suits speculative or satellite positions.
Final Verdict
Indian Overseas Bank has made credible progress in cleaning up its balance sheet and strengthening capital. However, its tiny EPS, zero dividend history, and minimal institutional interest cap its near-term appeal. The Indian Overseas Bank share price target 2026–2030 (₹38 to ₹68) reflects cautious optimism—rooted in fundamentals but tempered by structural limitations of a small PSU bank. Investors should monitor quarterly asset quality, CASA trends, and any shift in dividend policy before committing capital.
Disclaimer: Price targets are estimates based on publicly available data and sector analysis. They are not investment advice. Consult a SEBI-registered advisor before making decisions.
Sources
- Screener.in – Indian Overseas Bank Consolidated Page (FY2025 + TTM)
- Groww.in – IOB Stock Profile (Market Cap, P/E, CASA %)
- Indian Overseas Bank Investor Presentation (Q1 FY26)
- BSE India – Annual Report FY2025
- RBI Guidelines on Capital Adequacy and NPA Classification
