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Iyer dislocated his left shoulder while fielding during the first ODI against England on Tuesday and he is set to undergo surgery, which will rule him out of action for a minimum four months.
"Shreyas iyer has exited the bio-bubble," the BCCI said on Thursday ahead of the second ODI here.
Earlier in the day, Iyer vowed to come back from the injury even stronger.
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"You know what they say, the greater the setback, the stronger the comeback. I shall be back soon," Iyer tweeted.
"I've been reading your messages and have been overwhelmed by all the outpouring of love and support. Thank you from the bottom of my heart to everyone."
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The 26-year-old Iyer is also unlikely to play for English county side Lancashire in their one-day tournament.
Lancashire had on Monday announced the signing of Iyer for the tournament starting on July 23.
Iyer suffered the injury in the eighth over of the England innings when he dived on a drive hit by Jonny Bairstow off pacer Shardul Thakur.
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He looked in tremendous pain as he left the field clutching his shoulder.
On Tuesday, the BCCI had stated, "Shreyas Iyer subluxated (partially dislocated) his left shoulder in the 8th over while fielding. He has been taken for further scans."
Iyer had led Delhi Capitals to the final in the previous edition of the IPL.
In his absence, the DC captaincy could be handed to either Rishabh Pant, Australian Steve Smith or senior off-spinner R Ashwin.
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