Cochin Shipyard OFS gets massive response; govt to sell more shares

The government's Offer for Sale in Cochin Shipyard Ltd was oversubscribed 3.52 times on day one, prompting it to exercise the entire green-shoe option. Retail investors and employees can bid on July 8, according to the DIPAM Secretary.

The Government of India's Offer for Sale (OFS) in Cochin Shipyard Ltd received an overwhelming response from investors on the first day, with the issue being subscribed 3.52 times, prompting the government to exercise the entire green-shoe option.

The update was shared by the Secretary, Department of Investment and Public Asset Management (DIPAM), through a social media post on Tuesday. According to the Secretary, the government has decided to exercise the entire green-shoe option following the strong response from investors. Retail investors and eligible employees will be able to place their bids on July 8. The post stated "Offer for Sale in Cochin Shipyard Ltd received an overwhelming response from the investors and was oversubscribed 3.52 times on day one. Government has decided to exercise the entire green shoe option. Retail investors and employees get to bid tomorrow on 8th July 2026".

Offer Details and Structure

The government had announced the OFS on Monday with a base offer of 2.52 per cent of Cochin Shipyard's paid-up equity share capital. It had also included an additional 2.52 per cent under the green-shoe option, which could be exercised in case of oversubscription. The floor price for the OFS was fixed at Rs 1,400 per share. The offer opened for non-retail investors on Tuesday, while retail investors have been allowed to participate on Wednesday.

An Offer for Sale (OFS) is a stock market mechanism that enables promoters or large shareholders of listed companies to sell their existing shares directly to investors through a transparent bidding process on the stock exchanges.

The government had structured the Cochin Shipyard OFS with the provision to increase the size of the offer by exercising the green-shoe option if investor demand exceeded the base offer. Following the issue being subscribed 3.52 times on the first day, the government has now decided to fully exercise this option.

Market Reaction and Government Disinvestment

Despite the strong investor response to the OFS, shares of Cochin Shipyard Ltd ended the trading session lower on Monday. The stock declined by more than 5 per cent to close at Rs 1,430.70 per share.

The OFS forms part of the government's disinvestment programme through the Department of Investment and Public Asset Management (DIPAM), which periodically offers stakes in public sector enterprises to investors through the stock exchange mechanism.

With the entire green-shoe option now exercised, the focus shifts to retail investors and employees, who will bid for the shares on Tuesday. (ANI)

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