IOB Performance 2025 shows a sharp contrast: strong financial growth, but weak stock returns.
Financial growth versus stock market performance of Indian Overseas Bank
Dated 25.12.2025 : In 2025, Indian Overseas Bank (IOB) exhibited a striking contrast between its strong internal financial growth and its struggling stock market performance. While the bank reported record-breaking profits and significantly improved asset quality, its share price declined by more than 30% over the course of the year.
1. Financial Performance: Record Growth
Fundamentally, 2025 was a landmark year for IOB. The bank’s “turnaround” story matured into solid profitability.
- Profitability Surge: In the second quarter of FY2025-26 (ending September 2025), IOB reported a record net profit of ₹1,226 crore to ₹1,258 crore (depending on standalone/consolidated metrics), marking a massive 58%–61% year-on-year (YoY) jump.
- Asset Quality: The bank achieved a breakthrough in cleaning its balance sheet. Its Gross Non-Performing Assets (GNPA) ratio fell to 1.83% (from 2.72% the previous year), while Net NPA dropped to an impressive 0.28%.
- Revenue & Margins: Total revenue grew by approximately 8.6% YoY to over ₹9,200 crore. The Net Interest Margin (NIM) remained healthy at 3.21%, indicating efficient lending operations.
- Expansion: IOB aggressively expanded its footprint, adding 104 domestic branches in a single quarter, bringing its total network to over 3,370 branches.
2. Stock Market Performance: A Year of Decline
Despite the strong earnings, the stock market was less kind to IOB in 2025. The share price faced steady downward pressure throughout the year.
| Metric | Details (as of late Dec 2025) |
| Price Trend | Tumbled by ~34% since January 2025. |
| January 2025 Price | ~₹51.87 |
| December 2025 Price | ~₹33.92 |
| 52-Week High | ₹54.54 (some sources cite ₹56.80 in Dec ’24) |
| 52-Week Low | ₹33.50 |
| Market Cap | ~₹65,300 Crore |
Why the Stock Fell Despite Good Profits?
The primary reason for the stock’s underperformance, especially toward the end of the year, was the Government’s Offer for Sale (OFS).
- In December 2025, the Indian government announced plans to divest a 3% stake in the bank to meet public shareholding norms.
- The market typically reacts to an OFS by dragging the price down toward the floor price of the sale, leading to the stock hitting its 52-week low in late December.
- Additionally, despite high growth, the stock traded at a higher Price-to-Earnings (P/E) ratio (around 14.8) compared to the sector average, leading some analysts to label it “expensive” relative to peers.
Summary Table: 2025 Snapshot
| Category | Performance |
| Net Profit | Bullish (Up ~60% YoY) |
| Asset Quality | Excellent (Net NPA at 0.28%) |
| Stock Price | Bearish (Down ~34% YTD) |
| Dividend | Zero/Not Reported |
How IOB fares compared with PNB & SBI ?
Comparing Indian Overseas Bank (IOB) with heavyweights like State Bank of India (SBI) and Punjab National Bank (PNB) reveals a year of “growth vs. valuation.” While IOB led in percentage growth, its stock suffered due to a high valuation and government stake sale, whereas SBI and PNB rewarded shareholders with double-digit gains.
| Metric (Approx. 2025) | Indian Overseas Bank (IOB) | State Bank of India (SBI) | Punjab National Bank (PNB) |
| Q2 Net Profit | ₹1,258 Cr (↑~60%) | ₹20,160 Cr (↑10%) | ₹4,904 Cr (↑14%) |
| Asset Quality (NNPA) | 0.28% (Excellent) | 0.50% (Stable) | 0.40% (Strong) |
| Stock Return (YTD) | -34% (Bearish) | +25% (Bullish) | +19% (Bullish) |
| P/E Ratio | ~17.9 (High) | ~11.1 (Value) | ~8.2 (Value) |
| Market Status | Divestment pressure (OFS) | Market leader/Nifty anchor | Turnaround success |
Why IOB Fell While Others Rose
The divergence in stock price comes down to two specific factors:
- Valuation: Even after its price drop, IOB’s P/E ratio (~17.9) is significantly higher than SBI’s (~11) and PNB’s (~8). Markets felt IOB was “priced for perfection,” leaving little room for error.
- The Supply Shock: The Government’s Offer for Sale (OFS) in December 2025 to sell a 3% stake in IOB created a “supply overhang.” When the government sells shares, it usually does so at a discount, which naturally pulls the market price down. SBI and PNB did not face similar large-scale divestment pressure in late 2025.
Key Takeaway
In 2025, IOB was the best “operational” performer in terms of cleaning up bad loans and growth speed, but SBI and PNB were the better “investments” as their stock prices actually reflected their internal health.
This article is for informational purposes only. It summarizes updates from publicly available sources and AI-generated insights from a reputed AI app. We are not SEBI-registered investment advisors, and this content does not constitute investment advice
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