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Cochin Shipyard, a prominent Indian shipbuilding company, witnessed a significant surge in investor interest during its recent Offer for Sale (OFS). The government's 5% stake sale in the company attracted bids exceeding Rs 1,900 crore from institutional investors, prompting the government to exercise the green shoe option. This decision allows for an additional 2.5% stake to be sold, potentially increasing the total proceeds to the exchequer.
Institutional investors, who represent large financial institutions like mutual funds and pension funds, showed strong appetite for Cochin Shipyard shares. They oversubscribed the portion allocated to them, bidding for 1.28 crore shares at an indicative price of Rs 1,550.13 apiece, exceeding the initial offering of 59.19 lakh shares. This signifies investor confidence in the company's future prospects and its potential for growth.
The government's decision to exercise the green shoe option indicates its optimism about the OFS' success and its willingness to capitalize on the strong demand. Retail investors, who have a chance to participate on Thursday, will also be keen to secure a portion of the company's shares at the floor price of Rs 1,540 per share. The oversubscription by institutional investors suggests that the OFS may fetch more than the initially anticipated Rs 1,980 crore for the government.
This successful OFS serves as a positive indicator for Cochin Shipyard and the Indian shipbuilding sector. It highlights the company's strong fundamentals and its ability to attract investor confidence. The government's participation in the OFS signifies its commitment to strengthening the shipbuilding industry and fostering growth in the sector. As Cochin Shipyard expands its operations and capitalizes on new opportunities, the company is well-positioned to play a key role in India's economic development.
Source: Cochin Shipyard OFS Oversubscribed: Govt to Exercise Green Shoe Option