Government Exercises Full Green Shoe Option After Strong Demand
The Indian government has decided to exercise the entire green shoe option in its Offer for Sale (OFS) of Cochin Shipyard Ltd after receiving an overwhelming response from investors. Arunish Chawla, Secretary of the Department of Investment and Public Asset Management (DIPAM), announced the development on X, stating that the OFS was oversubscribed 3.52 times on the first day.
A green shoe option is a clause in an OFS that allows the seller to offer additional shares—typically 15% beyond the base issue size—when investor demand is high. By exercising the full green shoe option, the government will sell more shares than initially planned, capitalizing on the strong market interest.
OFS Details and Timeline
The government had earlier announced the sale of up to 5% of its stake in Cochin Shipyard through the OFS at a floor price of Rs 1,400 per share. The issue opened for non-retail investors on Tuesday, July 7, 2026, while retail investors and employees can place bids on Wednesday, July 8, 2026. The government currently holds a 67.91% stake in the company, which has a market capitalization of Rs 38,102 crore on the BSE.
Chawla's post on X confirmed the strong demand: “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.”
PSU Disinvestment Progress
So far this fiscal year, the government has raised a total of Rs 18,561 crore by selling shares in six public sector companies: Central Bank of India (CBI), Coal India, NHPC, NLC India, GIC, and IRFC. The government aims to raise Rs 80,000 crore in FY27 through asset monetization and PSU disinvestment. Cochin Shipyard's shares closed at Rs 1,430.70 on the NSE on Tuesday, down 5.03% or Rs 75.70 from the previous close.
