Update
Offer for Sale in Bank of Maharashtra received overwhelming response in the markets today. The issue was subscribed 400 percent of the base size. Government has decided to exercise the green shoe option. Retail investors get to bid tomorrow on 3rd December 2025.
The Government of India is planning to divest 5% stake in Bank of Maharashtra. DIPAM said: Offer for Sale in Bank of Maharashtra (BOM) will open on Wednesday for Non-Retail investors. Retail investors can bid on Wednesday. The government offers to disinvest 5% equity in the bank with an additional 1% as a green shoe option. This official declaration was made by DIPAM on social media platform – X. Understand below what is OFS and Green Shoe option.
What is an Offer for Sale (OFS)?
An Offer for Sale is a method used by major shareholders, such as the government or company promoters, to sell part of their existing stake in a listed company through the stock exchanges. In this process, investors can place bids during a specified time window and buy shares directly in the market. The company itself does not receive any money from the sale — the proceeds go to the shareholder who is selling. The Government of India frequently uses OFS to reduce its stake in public sector companies and meet disinvestment goals. In the case of Bank of Maharashtra, the government is using the OFS route to sell 5% of its shareholding.
What is a Green Shoe Option?
A Green Shoe Option allows the seller to offer additional shares if the demand during the sale is higher than expected. It acts like a reserve pool of shares that can be released only when bidding pressures rise. This avoids sudden price fluctuations and ensures smoother share allocation. In the current offer, the government has kept an extra 1% stake as a green shoe option, which means that if more investors want to buy Bank of Maharashtra shares beyond the planned 5%, the government can release the additional 1% to meet that demand.
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