Announces 10% reservation for retail investors in OFS
The Securities and Exchange Board of India (Sebi) today, 19 June 2014, announced expansion of the framework of Offer for Sale (OFS) of shares through the stock exchange mechanism. The OFS mechanism will now be available for shareholders of top 200 companies by market capitalization. So far, only top 100 companies by market capitalization were allowed to use the OFS route.
Sebi has also allowed non-promoter shareholders with shareholding of more than 10% to use the OFS route for share sales. So far, only promoters were allowed the OFS route for share sales.
Sebi has also announced that a minimum 10% of the issue size in an OFS shall be reserved for retail investors i.e. for the investors bidding for amounts less than Rs 2 lakh. In case this percentage is not fully utilized, the unutilized portion may be offered to other investors, Sebi said. Sebi also said that the seller of shares in an OFS may offer a discount to retail investors in accordance with the framework specified from time to time.
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