SJVN crashes by 9% as government launches OFS to sell 2.46% equity at heavy discount
SJVN crashes by 9% as government launches OFS to sell 2.46% equity at heavy discount
Shares of SJVN saw a significant decline of 9 percent in early trading on September 21. This drop occurred in response to the government’s announcement of an offer for sale (OFS) to divest up to a 4.92% equity stake in the company, offering the shares at a deeply discounted floor price.
Investors in the stock market often react to news and developments related to public offerings and government disinvestment plans. In this case, the discounted floor price set for the OFS likely influenced the decline in SJVN’s stock price as investors adjusted their positions based on the discounted offer.
As of 10:24 am on the National Stock Exchange (NSE), SJVN’s stock was trading at Rs 74.50, reflecting a 9.05% decrease. The government’s OFS involves the sale of 9.67 crore equity shares, equivalent to a 2.46% equity stake in SJVN. Additionally, there is an option to sell an additional 2.46% stake by retaining oversubscription.
The floor price for this offering was set at Rs 69 per share, representing a nearly 15% discount compared to the previous closing price. This discounted offer may have influenced the decline in SJVN’s stock price as investors reacted to the news of the OFS.
The offer for sale (OFS) in SJVN initiated the process for non-retail investors on September 21, with retail investors scheduled to participate on September 22. The floor price for this offering was set at Rs 69 per share, representing a nearly 15% discount compared to the previous closing price. This discounted pricing may have influenced the decline in SJVN’s stock price as investors responded to the news of the OFS.
Tuhin Kanta Pandey, Secretary of the Department of Investment and Public Asset Management (DIPAM), shared details about the offer for sale (OFS) schedule and the government’s intention to divest a 4.92% equity stake in SJVN. This stake includes a Green Shoe option of 2.46%, which allows for additional shares to be offered if there is oversubscription.
Retail investors will have the opportunity to participate in the offering during the designated retail investor bidding period. This provides retail investors with the chance to acquire shares in SJVN at the specified floor price, as set by the government. The OFS is designed to promote broader participation in the divestment process and allow retail investors to access shares at the discounted floor price.
The government is planning to divest a total of 4.92% equity stake in SJVN, which includes a Green Shoe option of 2.46%. The floor price for this offering has been set at Rs 69 per share. At this floor price, the sale of the 4.92% stake, equivalent to over 9.66 crore shares, is expected to generate over Rs 650 crore in proceeds.
This offer for sale (OFS) is part of the government’s broader disinvestment strategy aimed at reducing its ownership in public sector enterprises and raising resources for various fiscal requirements and development initiatives.
Notably, SJVN’s stock has witnessed a significant surge of 163.56% over the last six months. In contrast, the benchmark Nifty50 index has provided a return of 16.33% over the same period. This substantial increase in SJVN’s stock price may have attracted investor attention, and the OFS at a discounted floor price presents an opportunity for investors to acquire shares in the company.
