Hindustan Copper Green Shoe Option Sold Amid Strong Investor Demand
The Indian government announced plans to sell a 6% stake in Hindustan Copper through an Offer for Sale (OFS). Initially, it planned to sell just 3%, but demand from institutional investors was higher.
Demand exceeded the original amount by 41 times. To capitalize on this interest, the government decided to exercise its green shoe option and sell an additional 3% stake.
A green shoe option is a provision that allows companies to sell additional shares during an IPO to help stabilize the stock price after listing. However, in Hindustan Copper's case, it is being used as a means to sell more shares due to strong demand rather than a traditional IPO.
The government has set a disinvestment target of ₹80,000 crore for FY27 and has already raised about ₹52,700 crore this financial year. By selling additional shares through the green shoe option, the government aims to meet its target and potentially get more value per share.