The bank in August approved raising up to 40 billion rupees ($479.92 million) through a qualified institutions placement of shares.

Indian Bank did not give further details of the share issue on Tuesday.

It comes days after state-owned peer Bank of India's 45 billion rupees share sale, which was oversubscribed by more than four times.

Shares of Indian state-owned lenders have touched record highs this year, with Indian Bank's jump of more than 53% outperforming a near 29% rise in the Nifty PSU Bank index.

Indian Bank shares ended 1.5% higher on Tuesday.

($1 = 83.3470 Indian rupees)

(Reporting by Hritam Mukherjee in Bengaluru; Editing by Devika Syamnath)