The government is selling a 6% stake in Bank of Maharashtra through an Offer for Sale (OFS). On Day 1, the offering received 4x more bids than available shares, triggering the greenshoe option.

The government initially planned to sell 5% of its stake at ₹54 per share. With overwhelming investor demand (400% subscription), the government activated an additional 1% stake through the greenshoe option, bringing total divestment to 6%. This will raise approximately ₹2,492 crore for the exchequer.

It’s a built-in safety mechanism that allows the seller to offer extra shares if demand exceeds expectations. The underwriter can buy these shares back at the original offer price if the stock price rises—ensuring no profit or loss for them while meeting investor appetite and stabilizing prices. In this case, strong Day 1 interest automatically triggered the 1% additional option.

Retail investors bid on December 3. This strong institutional response signals market confidence in the bank’s fundamentals and helps the government meet its disinvestment targets.