GE T&D promoter entities to sell 11.7% stake via OFS

GE T&D India Ltd’s two promoter entities, Grid Equipments Private Ltd and GE Grid Alliance BV, have decided to sell an 11.7% equity stake through an Offer for Sale(OFS). The offer is open to non-retail investors today,  19 September 2024 and to retail investors, on 20 September 2024. A floor price of Rs.1,400 has been fixed for the share for the OFS, according to the company filing with stock exchanges. 

OFS Details & Oversubscription Option

The promoters are also contemplating an offer of 30 million shares which forms 11.7 % of the total shares. In case of oversubscription, the promoters have included a green shoe option of 10 million additional shares which could increase the total NSA enlarging the total stake sale to 15.6 which is 40 million shares. The floor price of Rs.1,400 helps the investors as it creates a chance to be investors at a reasonable price.

Participation Structure

The OFS process has been spread over two days. On the first day, participation is limited to non-retail investors, while on the second day, there will be participation from retail and non-retail investors because unallotted bids are carried forward. 10% of the portion is kept aside for the retail investors and mutual funds and insurance companies are obliged to get not less than 25% of the Total offer. Across stock exchanges, all retail bids have been restricted to Rs.2 lakh to ensure fair bids.

Broker & Market Reaction

J.P. Morgan India Private Limited has been appointed as the broker for this OFS. Shares of GE T&D India closed at Rs.1,705, reflecting a 1.07% increase from the previous day’s close. This market activity comes ahead of the OFS and the company’s order from Power Grid Corporation for SCADA/EMS control centers worth Rs.490 crore, excluding taxes.

Conclusion: All in all, the GE T&D India OFS offers an appealing entry point for investors with its floor price and potential oversubscription. With backing from mutual funds and insurance companies, it will be interesting to see how the market responds.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.