'Offer for sale' mechanism to get mega boost as Sebi relaxes norms

Among other things, the cooling-off period required between two OFSs has been reduced to as less as two weeks from 12 weeks at present

Market regulator Securities and Exchange Board of India’s (Sebi’s) new relaxations are set to give a fillip to the offer for sale (OFS) mechanism, which allows promoters and other large shareholders to divest their equity holdings.

Industry players say the OFS route could emerge as a strong alternative to the block deal mechanism as the former offers better flexibility in terms of pricing.

Currently, the use of the OFS route is limited as present rules allow only promoters and those holding more than 10 per cent stake to avail of this mechanism. However, last week Sebi announced major modifications to