The government is set to sell up to seven per cent stake in Housing & Urban Development Corporation (HUDCO) at a floor price of Rs 79 per share.
The Offer For Sale (OFS) for over 14.01 crore shares or seven per cent stake will open for institutional investors on Wednesday, while retail investors can place bids for shares on Thursday. As many as 70,06,650 shares are available for retail investors.
"Offer for Sale in HUDCO opens tomorrow for non-retail investors. Retail investors can bid on Thursday. Government will divest 7 per cent equity, including a Green Shoe Option of 3.5 per cent," Department of Investment and Public Asset Management (DIPAM) secretary Tuhin Kanta Pandey tweeted on Tuesday.
Greenshoe Option, also known as over-allotment option, refers to a provision in an underwriting agreement that grants the underwriter the right to sell more shares than originally planned in an IPO (OFS in this case) if the demand turns out to be higher than expected. The term comes from the name of the first which implemented this clause: the Green Shoe Manufacturing Company.
The floor price of Rs 79 is lower than Tuesday's closing price of Rs 89.95. The government expects to raise Rs 1,000 crore from the stake sale.
The government owns 81.8 per cent stake in HUDCO and the offloading will reduce its holding to 74.8 per cent which is below the maximum permissible cap of 75 per cent.
