Indostar Capital Shares Fall 5% After OFS Announcement

Indostar Capital OFS opens on May 3, with promoters selling a 14% stake.

Non-banking financial firm Indostar Capital Finance fell 5% in early trade on May 3, a day after it announced an offer for sale(OFS) at a floor price which was 22.8% below its closing price.

The stock was trading at Rs 117 on the BSE at 9:15 am, down 5% from its previous close. The stock has fallen 20% so far this year.

The company told the exchanges on May 2 that promoters IndoStar Capital and Everstone Capital Partners II LLC plan to sell 19.34 million shares, representing a 14.21% stake in the company, through an offer for sale (OFS) at a floor price of Rs 95 per share with 22.8% discount from the day’s close of Rs 123.15.

The company said the OFS will open to non-retail investors on May 3, 2023, and retail investors on May 4.

According to the company’s announcement, 10% of the offering size will be reserved for retail investors, subject to valid bids being submitted.

If retail investors do not subscribe to the reserved portion, unsubscribed shares will be offered to non-retail investors who choose to carry forward.

At least 25% of the offering shares will be reserved for mutual funds and insurance companies, subject to valid bids at or above the reserve price.

According to the SEBI OFS circular, the company said that allocation would be made on a price-first basis based on multiple clearing prices, except for retail investors, who can bid at the cut-off price.

Motilal Oswal Financial Services Ltd will act as the “selling broker”, and the Bombay Stock Exchange (BSE) has been appointed as the stock exchange for OFS.

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