Green shoe option
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
01 June 2017
Sir,
I don't understand the concept of Green shoe option. How it's possible for the book runners to purchase the shares at issue price from stock market when the price rises?or Does it mean the company will allot them new shares at the issue price or something else?
I don't understand the concept of Green shoe option. How it's possible for the book runners to purchase the shares at issue price from stock market when the price rises?or Does it mean the company will allot them new shares at the issue price or something else?
Amol S Joglekar
(Expert)
12 July 2017
Greenshoe option is a special provision in an IPO prospectus, which allows underwriters to sell investors more shares than originally planned by the issuer. This would normally be done if the demand for a security issue proves higher than expected.
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