The Securities and Exchange Board of India (Sebi) has amended the Disclosure and Investor Protection Guidelines 2000 for initial public offerings on book-built basis with a greenshoe option.
Under the new guidelines, an issuer making an initial public offer of equity shares through the book building mechanism can avail of the greenshoe option for stabilising the post-listing price of its shares.
The greenshoe option is an option of allocating shares in excess of the shares included in the public issue. It is extensively used in international IPOs as a stabilisation tool for the post listing price of the newly issued shares.
Under the new Sebi guidelines for greenshoe option, a company will have appoint one of the lead book runners from among the issue management team as the
