IndoStar Capital Finance promoters to sell 14.2% stake via OFS; floor price at 20% discount

The promoters of IndoStar Capital Finance are looking to sell about 14.2% stake in the company through an offer for sale (OFS), which opens on May 3.

Under the OFS, promoters Indostar Capital and Everstone Capital Partners II LLC will offload about 1.93 crore equity shares with a face value of Rs 10 each.

While Indostar Capital is planning to give up 1.82 crore units, Everstone Capital will sell about 11.35 lakh. The floor price for the offer is fixed at Rs 95 per unit, at 20% discount from the last closed price.

The proposed OFS will take place on a separate window of the exchanges. On May 3, which is the 'T Day', the OFS is open for non-retail investors.

Non-retail investors, who have placed their bids on T Day, may indicate their willingness to carry forward their un-allotted bids to T+1 day for allocation to them in the unsubscribed portion of the retail category.

On May 4, the OFS is available for retail investors, and for non-retail investors, who chose to carry forward their unallotted bids to T+1 day.

Retail investors are individuals who place bids to offer shares of total value of not more than Rs 2 lakh aggregated across stock exchanges. No discount to the cut-off price is being offered to retail investors.

About 10% of the offer size is set to be reserved for allocation to the retail category, subject to receipt of valid bids. The exchanges will decide the quantity of offer and shares eligible to be considered in the retail category, based on the floor price declared by the sellers.

A minimum 25% of the offer shares will be reserved for mutual funds and insurance companies.

Motilal Oswal Financial Services will act as broker on behalf of the sellers.

Settlement will take place on a trade-for-trade basis. For non-institutional orders or bids and for institutional orders with 100% margin, settlement will take place on T+1 day.

In case of orders or bids of institutional investors with no margin, settlement will be as per the existing rules for secondary market transactions.

On Friday, IndoStar Capital Finance shares closed 2.48% lower at Rs 120 on the NSE. So far this year, the stock has lost 26%.