The Finance Ministry on Thursday decided to exercise the green shoe option as the offer-for-sale of Hindustan Aeronautics Ltd. (HAL) has received a good response, with the issue subscribed 4.5 times on day one.
“Offer for Sale (OFS) of government shares in HAL got great response on day one. Issue subscribed 4.5 times of base size at a clearing price above the floor price by non-retail investors. Govt has decided to exercise the green shoe option. Retail investors get chance to bid tomorrow,” DIPAM Secretary Tuhin Kanta Pandey said in a tweet.
The OFS comprised base issue size of 1.75%, or 58.51 lakh shares, with an option to retain over-subscription of an equal quantum.
The government on Wednesday proposed to sell up to a 3.5% stake in HAL at a floor price of ₹2,450 a share, if fully subscribed, the OFS would fetch about ₹2,800 crore to the exchequer.
On the first day of OFS, shares of HAL declined 4.87% to close at ₹2,497.40 each on the BSE.
The floor price is at a discount of about 6.7% over the closing share price of HAL on BSE.
The government currently holds 75.15% of HAL, which is a Central Public Sector Enterprise (CPSE) under the Defence Ministry.
The proceeds from HAL OFS would add up to the government’s disinvestment kitty for the current fiscal.
The government has so far mopped up ₹31,106.64 crore from disinvestment and share buyback in CPSEs.
The government had last month pegged lower revised estimates of disinvestment revenue estimates for the current fiscal at ₹50,000 crore, against the budget target of ₹65,000 crore.
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