GREEN SHOE OPTION

Green shoe option

 The term "Green Shoe" came from a

company founded in 1919 as Green Shoe
Manufacturing Company, now called
Stride Rite Corporation, which was the first
company to whom this practice permitted
to use an offering in 1960.
Greenshoe option

 Over-allotment option
 It’s a provision, in underwriting agreement,
that allows the underwriter to sell the
additional shares then the original number of
shares offered.
Main Objectives

To provide
 Stability
 Liquidity

To a public offering
SEBI guidelines

A pre-issue contract is required to be entered

into for this purpose with an existing
shareholder.
 Underwriter can issue 15% additional shares
of the original offer.
 Underwriter can exercise that option with in
the 30 days from the date of allotment of
shares
Dousing & Mopping

Company have two resources

 Shares
 Cash
Questions, if any

Thank you