{"id":11334,"date":"2023-06-01T03:02:24","date_gmt":"2023-05-31T21:32:24","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=11334"},"modified":"2025-03-30T01:58:37","modified_gmt":"2025-03-29T20:28:37","slug":"what-is-offer-for-sale-ofs","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/what-is-offer-for-sale-ofs\/","title":{"rendered":"What is Offer For Sale (OFS)?"},"content":{"rendered":"<h2><strong>About Offer For Sale (OFS):<\/strong><\/h2>\n<ul>\n<li><strong>What is it?<\/strong> OFS is a <strong>simpler method of<\/strong> <strong>share sale through the exchange platform for listed companies.<\/strong><\/li>\n<li>The OFS method was <strong>brought in by <\/strong>the Securities and Exchange Board of India (<strong>SEBI<\/strong>) in <strong>2012 <\/strong>as a simpler one <strong>to aid promoters of listed forms to dilute their stake<\/strong>\u00a0 and comply with the minimum public shareholding norms by June 2013.<\/li>\n<li>The method <strong>was largely adopted by listed companies<\/strong>, both state-run and private, to adhere to the SEBI order.<\/li>\n<li><strong>Later, the government started using this route to divest its shareholding in public sector enterprises.<\/strong><\/li>\n<li><strong>Features<\/strong>:\n<ul>\n<li><strong>Unlike a follow-on public offering (FPO<\/strong>), where companies can raise funds by issuing fresh shares or promoters can sell their existing stakes, or both, <strong>the OFS mechanism is used only when existing shares are put on the block.<\/strong><\/li>\n<li><strong>Only promoters or shareholders holding more than 10 per cent<\/strong> of the share capital in a company <strong>can come up with such an issue<\/strong>.<\/li>\n<li>The mechanism is <strong>available to 200 top companies<\/strong> in terms of market capitalisation.<\/li>\n<li>In an OFS, <strong>a minimum of 25 per cent of the shares offered, are reserved for mutual funds (MFs) and insurance companies<\/strong>. At any point, <strong>no single bidder other than these two institutional categories is allocated more than 25 per cent of the size of the offering<\/strong>.<\/li>\n<li>A <strong>minimum of 10 per cent<\/strong> of the offer size is <strong>reserved for retail investors.<\/strong><\/li>\n<li>A <strong>seller can offer a discount to retail investors either on the bid price<\/strong> or on the final allotment price.<\/li>\n<li>It is <strong>mandatory for the company to inform the stock exchanges two banking days prior<\/strong> to the OFS about its intention.<\/li>\n<li><strong>Anyone can bid for these shares<\/strong>, be it foreign institutional investors, retail investors or companies.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<hr \/>\n<h3>Q1)\u00a0What is follow-on public offering (FPO)?<\/h3>\n<p>A follow-on public offer (FPO) is the issuance of shares to investors by a company listed on a stock exchange. A follow-on offering is an issuance of additional shares made by a company after an initial public offering (IPO). Follow-on offerings are also known as secondary offerings.<\/p>\n<p><strong>Source:\u00a0<\/strong><a href=\"https:\/\/economictimes.indiatimes.com\/markets\/stocks\/news\/govt-to-sell-up-to-3-stake-in-coal-india-via-ofs\/articleshow\/100653728.cms\" target=\"_blank\" rel=\"nofollow noopener\"><u>Govt to sell up to 3% stake in Coal India via OFS<\/u><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Offer For Sale is a simpler method of share sale through the exchange platform for listed companies.<\/p>\n","protected":false},"author":5,"featured_media":11335,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1],"tags":[],"class_list":{"0":"post-11334","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-upsc-prelims-current-affairs","8":"no-featured-image-padding"},"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/11334","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=11334"}],"version-history":[{"count":0,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/11334\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/11335"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=11334"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=11334"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=11334"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}