Is Hindustan Copper's "Green Shoe" really a Green Shoe?
Summary
This episode clarifies the true meaning of the "green shoe" option, a mechanism used in IPOs to stabilize stock prices by allowing up to 15% additional shares to be sold. It contrasts this technical definition with the government’s recent use of the term for Hindustan Copper’s stake sale, which is actually a disinvestment move to meet fiscal targets rather than a price stabilization effort. The summary also explains why green shoes are rare in India due to profit-sharing rules and shares the historical origin of the term from a 1963 US company.
Topics discussed
Intro and Hindustan Copper stake sale announcement
Government exercises 'green shoe' due to high demand
Technical definition of Green Shoe in IPOs
How stabilizing agents borrow shares to support price
Example: Buying back shares if price falls
Issuing new shares if buyback falls short
Why Green Shoes are rare in India vs US
Hindustan Copper is not an IPO case
Govt selling more to meet disinvestment targets
Origin of the term 'Green Shoe' and outro
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