Govt To Sell Up To 3% Stake In Indian Overseas Bank Via OFS; Check Floor Price

The government aims to sell up to 3% stake in Indian Overseas Bank via an offer-for-sale, the Department of Investment and Public Asset Management (DIPAM) said in an update on social media.

The OFS will open on Wednesday for non-retail investors. Retail investors will be allowed to place bids on Thursday, DIPAM said.

"Government offers to disinvest 2% equity in the bank with an additional 1% as a green shoe option," it added. The floor price has been fixed as Rs 34 per share.

The government proposes to sell 38.51 crore shares under the base offer, which is valued at about Rs 1,309 crore at the floor price. The green shoe option may fetch the government an additional amount of around Rs 646 crore.

According to an exchange filing from the bank, Dec. 17, is set as the 'T day' while Dec. 18, will be the 'T+1 day' for the OFS.

Further, non-retail investors who choose to carry forward their un-allotted bids from T day, will have an option to additionally sell 19 crore equity shares, which is the additional 1%, as the 'Oversubscription Option'. This will take place through a separate, designated window of the BSE and NSE.

"Additionally, 1,50,000 Equity Shares of the Bank may be offered to eligible employees of the Bank through the stock exchange mechanism....The eligible employees may apply for Equity Shares amounting up to Rs 500,000," according to the filing.

Before the OFS was announced, Indian Overseas Bank stock fell as much as 1.41% on Tuesday to Rs 36.45 apiece on the NSE. It closed 1.08% lower at Rs 36.57 apiece, compared to an 0.64% decline in the benchmark Nifty 50. The shares have declined 34.75% in the last 12 months.