NEW DELHI, Oct. 27 -- Indian Overseas Bank (IOB) plans to start raising Rs.5,000 crore in tranches towards the end of the December quarter or early next quarter, depending on market conditions, managing director and chief executive officer Ajay Kumar Srivastava said. The state-run bank's board approved the proposal in July, he said.

The capital raise could reduce the government's shareholding by an estimated six percentage points from 92.44% as of September, Srivastava told Mint in an interview. Lowering the government's holding will help meet a requirement that at least a quarter of a listed entity's shares be held by the public.

While state-run banks with more than 75% government holding have received extensions to meet the minimum pu...