Business Standard

New sale, old tale

Related News

Government-led oil major Oil and Natural Gas Corporation (ONGC) on Thursday, sold 427.77 million shares through an offer for sale method. To find out all about this new method of disinvestment, read on.

What is an offer for sale through auction?
It is the latest method introduced by the market regulator to enable large companies raise money through stock exchanges.

Who can raise money through this route?
Only the top 100 companies in terms of are allowed to raise money through this route.

How long will the auction be open?
The auction is open during the trading hours of the market and has to be completed within a day.

How is the allocation price determined?
The seller should inform the floor price. Floor price is the minimum price at which the seller intends to sell the shares. The seller has the option to announce the floor price to the market or submit the floor price to the stock exchange in a sealed envelope. Where the floor price is submitted to the stock exchange in a sealed envelope, it shall be declared to the market after closure of the offer. has announced a floor price of Rs 290 per share

How is the allocation done?
Allocation can be done either on price priority basis or on proportionate basis. ONGC auction was conducted on price-priority basis, wherein the highest bidder gets maximum allotment. In the price-priority method, the exchanges will show multiple clearing prices and the number of shares allotted at each of these clearing prices.

Who can bid?
All kinds of shareholders are eligible to bid for an offer for sale through auction.

Is there any cap on allotment?
No single bidder can be allotted more than 25 per cent of the shares on offer. However, insurance companies and are exempted from this rule. This has probably helped the ONGC offer sail through with investments from LIC.

What are the advantages of this route?
Large institutional investors who want to buy a significant chunk of a stock can use this route to buy shares without disturbing the share prices. Companies also can raise money quickly without going through the lengthy procedure required in the case of a public offer.

What happens if the issue is undersubscribed?
The seller has the option to retain the subscribed portion or cancel the sale.

Read more on:   
|
|
|
|

New sale, old tale

Government-led oil major Oil and Natural Gas Corporation (ONGC) on Thursday, sold 427.77 million shares through an offer for sale method. To find out all about this new method of disinvestment, read on.

Government-led oil major Oil and Natural Gas Corporation (ONGC) on Thursday, sold 427.77 million shares through an offer for sale method. To find out all about this new method of disinvestment, read on.

What is an offer for sale through auction?
It is the latest method introduced by the market regulator to enable large companies raise money through stock exchanges.

Who can raise money through this route?
Only the top 100 companies in terms of are allowed to raise money through this route.

How long will the auction be open?
The auction is open during the trading hours of the market and has to be completed within a day.

How is the allocation price determined?
The seller should inform the floor price. Floor price is the minimum price at which the seller intends to sell the shares. The seller has the option to announce the floor price to the market or submit the floor price to the stock exchange in a sealed envelope. Where the floor price is submitted to the stock exchange in a sealed envelope, it shall be declared to the market after closure of the offer. has announced a floor price of Rs 290 per share

How is the allocation done?
Allocation can be done either on price priority basis or on proportionate basis. ONGC auction was conducted on price-priority basis, wherein the highest bidder gets maximum allotment. In the price-priority method, the exchanges will show multiple clearing prices and the number of shares allotted at each of these clearing prices.

Who can bid?
All kinds of shareholders are eligible to bid for an offer for sale through auction.

Is there any cap on allotment?
No single bidder can be allotted more than 25 per cent of the shares on offer. However, insurance companies and are exempted from this rule. This has probably helped the ONGC offer sail through with investments from LIC.

What are the advantages of this route?
Large institutional investors who want to buy a significant chunk of a stock can use this route to buy shares without disturbing the share prices. Companies also can raise money quickly without going through the lengthy procedure required in the case of a public offer.

What happens if the issue is undersubscribed?
The seller has the option to retain the subscribed portion or cancel the sale.

image

Read More

Flexible gains

ICICI Prudential Dynamic Plan is a flexi-cap opportunity fund launched in November 2002. The fund has been ranked in the top 30 percentile, that is, ...

Recommended for you

Advertisements

Quick Links

Market News

Nifty holds 8450; SBI ends 2.4% lower post results

Sensex ends 148 points higher at 27,957. HDFC, ONGC, TCS gain

Sensex ends above 27,900 amid volatile session

Provisionally, the Sensex gained 134.71 points to end at 27,944.06 and the Nifty rose 27.80 points to close at 8,448.80

Sangam (India) zooms over 50% in four days on stake hike by promoter

The stock is currently trading at its record high of Rs 125 and has rallied 54% from Rs 81 on May 19.

Sagar Cements surges after turnaround in Q4

The stock surged 16% to Rs 408 after reported net profit of Rs 21.70 crore in March quarter against loss of Rs 11.36 crore in the year ago ...

SBI pares early gains post Q4 results

The stock surged 5% to Rs 305 after reported 23% year on year jump in standalone net profit at Rs 3,742 crore in March quarter.

 

Back to Top