The Centre will divest up to 3% stake in Indian Overseas Bank (IOB) through an offer for sale (OFS) that opens on Wednesday, December 17. The government plans to offload up to a 2% stake, or 38,51,31,796 equity shares, on Wednesday through the non-retail window.
The OFS will open for retail investors on Thursday, December 18, with the government retaining the option to sell an additional 1% stake, or 19,25,65,898 shares, via a green shoe option through a separate designated window.
The floor price has been set at Rs 34 per equity share and the offer will take place during trading hours and orders can be placed on the BSE and the NSE. At the floor price, the OFS size is worth over Rs 1,964 crore. The floor price is at a 7% discount over today’s closing price of Rs 36.55 on the NSE.
The lender informed about the development after market hours on Tuesday and IOB shares today fell over 1%.
The allocation will be made at or above the floor price on a price priority basis at multiple clearing prices, in accordance with the OFS guidelines, the filing to the exchanges said. However, the retail investors will have an option to bid at or above the cut-off price and for whom the final allocation price may be below the floor price on account of retail discount.
The broker to the offer is Goldman Sachs (India) Securities Private Limited.
IOB shares have been a market laggard, falling 34% in the past one year. The stock has lagged the sectoral benchmark Nifty PSU bank whose returns over the past 12 months are to the tune of 16%. Meanwhile the broader Nifty index has gained 5%.
The stock is currently trading below its 50-day and 200-day simple moving averages (SMAs) of Rs 39.1 and Rs 39 according to Trendlyne data. It has also traded with very high volatility with 1-year beta hovering near the 1.3 mark.
Source: Economic Times