{"id":13506,"date":"2023-07-28T09:36:07","date_gmt":"2023-07-28T04:06:07","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=13506"},"modified":"2025-04-02T04:56:22","modified_gmt":"2025-04-01T23:26:22","slug":"what-is-offer-for-sale","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/what-is-offer-for-sale\/","title":{"rendered":"What is Offer for Sale?"},"content":{"rendered":"<h2><strong>About Offer for Sale:\u00a0<\/strong><\/h2>\n<p>&nbsp;<\/p>\n<ul>\n<li>It is a simpler <strong>method of share sale through the exchange<\/strong> platform for listed companies.<\/li>\n<li>The mechanism was first introduced by <strong>India\u2019s securities market regulator Sebi<\/strong> in 2012.<\/li>\n<li><strong>Aim:<\/strong> To make it easier for promoters of publicly-traded companies to cut their holdings and comply with the minimum public shareholding norms by June 2013.<\/li>\n<li>The method was <strong>largely adopted by listed companies<\/strong>, both state-run and private, to adhere to the Sebi order.<\/li>\n<li>Later, the government started using this route to divest its shareholding in public sector enterprises.<\/li>\n<li>\u00a0In an OFS, promoters of a company will dilute their stake by selling their shares to retail investors, companies, Foreign Institutional Investors (FIIs) and Qualified Institutional Buyers (QIBs) on an exchange platform.<\/li>\n<li><strong>Features of Offer for sale<\/strong>\n<ul>\n<li>Unlike a follow-on public offering (FPO), where companies can raise funds by issuing fresh shares or promoters can sell their existing stakes, or both, the OFS mechanism is <strong>used only when existing shares are put on the block.<\/strong><\/li>\n<li><strong>Only promoters or shareholders holding<\/strong> more <strong>than 10 per cent<\/strong> of the share capital in a company can come up with such an issue.<\/li>\n<li>The mechanism is available to 200 top companies in terms of market capitalisation.<\/li>\n<li>In an OFS, a <strong>minimum of 25 per cent<\/strong> of the shares offered, <strong>are reserved for mutual funds<\/strong> (MFs) and insurance companies.<\/li>\n<li>At any point, no single bidder other than these two institutional categories is allocated more than 25 per cent of the size of the offering.<\/li>\n<li>A minimum of <strong>10 per cent of the offer<\/strong> size is reserved <strong>for retail investors.<\/strong><\/li>\n<li>A seller can offer a discount to retail investors either on the bid price or on the final allotment price.<\/li>\n<li>It is mandatory for the company to inform the stock exchanges two banking days prior to the OFS about its intention.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<hr \/>\n<h3>Q) What is Foreign Institutional Investors?<\/h3>\n<p>Foreign Institutional Investors (FIIs), also known as Foreign Portfolio Investors (FPIs), are entities that invest in financial assets, such as stocks, bonds, and other securities, of a country different from their own. These investors are typically large institutions, including mutual funds, pension funds, hedge funds, insurance companies, and sovereign wealth funds, among others.<\/p>\n<p>&nbsp;<\/p>\n<p><strong>Source:<\/strong>\u00a0<a href=\"https:\/\/www.thehindu.com\/business\/Industry\/rail-vikas-nigam-ltd-offer-for-sale-over-subscribed-institutional-buyers-place-bids-worth-2000-crore\/article67129407.ece\" target=\"_blank\" rel=\"nofollow noopener\"><u>Rail Vikas Nigam Ltd. offer-for-sale over-subscribed, institutional buyers place bids worth \u20b92,000 crore<\/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":13507,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1],"tags":[],"class_list":{"0":"post-13506","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\/13506","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=13506"}],"version-history":[{"count":0,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/13506\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/13507"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=13506"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=13506"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=13506"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}