Offer for Sale (OFS): All you wanted to know

•   What is all the fuss about OFS ?

OFS stands for Offer for Sale, similar to FPO's (Follow on Public Offer). OFS is done by already listed companies on stock exchanges, enables promoter to  dilute their holdings in listed companies in a transparent manner with a wider participation through exchange based bidding platform. Recently MMTS completed its OFS for Rs 60 where its Market price was Rs 204.

• Why do companies go for OFS ?

In June 2010, the Union ministry of finance had issued guidelines pertaining to minimum public shareholding for all listed corporates.To adhere Promoters have to sell at least 25% of their equity capital to meet the minimum public shareholding norm laid out by capital market regulator Securities and Exchange Board of India.

• What do you mean by floor price under OFS?

Floor price can be defined as minimum price to at which you can apply under OFS. Any order placed below the floor price will not be accepted. It is mandatory for the seller to disclose floor price.Eg Jet Airways came with a Floor Price of Rs 510/-

•  Can  Retail Investor participate in OFS?

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