What is Offer For Sale (OFS)?


Offer for sale is the method by which the promoters of listed companies reduce their holdings by selling their stake to public through stock exchange platform. Other shareholders who hold more than 10% of shares in 

the company are also allowed to offload their stake through OFS.



Why do promoters sell their stake through OFS?


As per SEBI norms, a listed company should maintain a minimum of 25% of public shareholding. Hence, promoters of listed companies in which public shareholding is less than this threshold put up their shares on the block for sale in order to comply with this norm. OFS is one of the several other ways to comply with this norm. However, off late, OFS route is adopted by Government to carry on disinvestment in PSUs.


Who all are eligible to participate in OFS?


Following entities are allowed to participate in OFS:

Mutual funds

Insurance companies

Retail Investors

Foreign Portfolio Investors

Trusts

Hindu Undivided Families (HUF)

Body Corporates

Non-Resident Indians

Qualified Institutional

Minimum 10% of the offer size is reserved for retail investors and minimum 25% is reserved for mutual funds and insurance companies.


Is there any preference offered to retail investors in OFS?


Yes, retail investors are generally allotted shares at a discount either on the bid price or on the final allotment price.


For how many days this offer will be open?

Usually, this offer is open for only one day.


Where and how can I know about the OFS by companies?

The issuing company is mandated to inform the stock exchanges at least two banking day prior to the proposed OFS. So, investors can retrieve the information on OFS from the NSE website (click here to live OFS on NSE website) once the company informs stock exchange about its intention. Investors can also look for the information from their stock brokers and business news papers.


How does offer for sale (OFS) take place?

In an offer for sale (OFS), the company fixes “Floor Price”. Investors willing to bid should do it at a price above the floor price, because bids below floor price will not be accepted. Usually floor price is fixed at a discount to prevailing market price.


How do allocation takes place?


Based on the bids received, discovery price will be announced at the end of the day and shares will be allocated at cut-off price. Retail investors will be allocated at discount.


When will the investor get the shares in their demat account?


Investors will get the shares into their demat account on T+2 days.


In case of non-allotment, when will the investor get back the money? 


In case of non-allotment, money will be credited to trading account on T+1 day.


What are the charges retail investor has to pay for participating in OFS?


Retail investors will incur the charges just like a normal transaction in equity segment.


How do I place my bid in OFS?


Investors are required to place their bids with our centralized dealing support executive to participate in OFS. You can call our dealing desk @ 


044-49427576 / 044-28214171


or email your request to support@tradeplusonline.com. 



How will I be intimated on allotment?


On allotment, investor will receive the contract note on the same day evening.


For more details and FAQ on OFS click here . If you like to see the details in table form click here