Sebi tweaks offer for sale norms

OFS will be conducted over two days, with second day reserved for retail investors

The Securities and Exchange Board of India (Sebi) has made changes to the offer for sale (OFS) framework to streamline retail participation. Going ahead, an OFS will be conducted over two days, with the second day reserved for retail investors. “On the commencement of OFS on T day (the day of the OFS), only non-retail investors shall be permitted to place their bids. Cut-off price shall be determined based on the bids received on T day as per the extant guidelines,” Sebi said in a circular. Retail investors - those investing less than Rs 2 lakh - will have to bid on the second day either opting to bid at cut-off price or by placing price bids. The bids of non-retail investors will be carried forward if retail portion remains unallocated, Sebi has said. Non-retail investors will, however, have the choice to carry forward their bids and their settlement will happen two days later.

OFS is a popular share sale mechanism used by the government for disinvestment. Under this route, a promoter or any big shareholder is allowed to sell their holdings in a company through a separate platform provided by stock exchanges. Earlier this month, the government had raised Rs 600 crore by selling a 10 per cent stake in Engineers India through the OFS route.