Companies garner Rs 77k cr via OFS in 3-yrs; PSUs mop-up Rs 63k-cr

The offer for sale mechanism has significantly helped the government's disinvestment drive

Indian companies have raised a staggering Rs 77,023 crore by selling shares through OFS mechanism in a little over three years, with PSUs contributing 82 per cent of the total fund mop-up.

The offer for sale (OFS) mechanism has significantly helped the government's disinvestment drive.

Between February 2012 and March 2015, 129 companies opted for OFS route to mobilise Rs 77,023 crore, while PSUs alone raked in Rs 63,576 crore, as per the latest data.

Companies garnered Rs 28,486 crore last fiscal; Rs 6,993 crore in 2013-14; Rs 28,025 crore in 2012-13 and 13,518 crore in 2011-12 (last two month February-March).

The Offer for Sale through stock exchange mechanism was introduced by capital markets regulator Sebi in February 2012, to enable divestment by promoters to achieve minimum public shareholding in listed companies.

The OFS framework was subsequently modified based on suggestions received from the market participants to enable disinvestment by government in PSUs.

The mechanism has greatly facilitated the speedy disinvestment of government shareholding in PSUs with full transparency and market wide participation.

Recently, Sebi issued a new set of guidelines for bidding in the OFS segment that requires companies to disclose their OFS plans two banking days in advance.

The new norms could lead to most OFS taking place on Mondays. It would also help in the government's disinvestment drive.

Currently, the companies are required to give an advance notice of two trading days before the OFS, which the government has been saying gives scope for the speculators to beat down the share price of the disinvestment-bound PSUs.

The new norms will help reduce the gap between the disclosure of the OFS and the actual share sale in cases where the intermediate days include trading holidays when banks are open, such as Saturdays.