The new norms regarding offer for sale (OFS) of shares has come into effect. Markets regulator Securities and Exchange Board of India (SEBI) on Friday issued a detailed circular regarding new OFS norms.
Under the new framework, companies with market capitalisation of more than Rs 10 billion can use the OFS mechanism to offload shares. Earlier only top 200 companies were to sell stakes through OFS route, now with the new norms, more than 700 companies will be able to sell shares through the OFS route.
Further, as per the new rules the selling company has to cancel the offer if it fails to get sufficient demand from non-retail investors at or above the floor price on the transaction day.