Until now, only promoter and advertising group organizations were allowed to sell shares through offering on exchanges.
In the event that a shareholder other than a promoter of a company offers scripts through the OFS mechanism, ad or ad group organizations can similarly participate to purchase compliance stock. certain regulations, the market regulator said in a statement.
The OFS mechanism will now be available to companies with a market capitalization of Rs 1,000 crore or more. The threshold for market capitalization will be calculated as the average daily market capitalization for the 6-month period preceding the OFS opening month.
Under the revised framework, the minimum size of OFS should be Rs 25 crore. However, the size of the offer can be less than Rs 25 crore for promoter and promoter group entities to meet the minimum public share ownership norm in a single tranche, the regulator said. .
Sellers of shares in OFS must appoint a broker for this purpose, according to regulatory guidelines. .
Investors who choose to purchase shares offered in OFS can also hire a broker. In this case, the seller’s broker can also execute the transactions on behalf of the qualified buyer. Under previous standards, sellers in OFS could offer discounts to retail investors. The details of the discount and reservation rates for retail investors must be disclosed in advance in OFS announcements to exchanges.
To make it easier for retail investors to join OFS, Sebi has mandated that sellers offer the option to bid their bid at a favorable price, in addition to bidding.
Owners of listed real estate investment trusts (REITs) and infrastructure investment funds (InvITs) are also allowed to conduct OFS through exchanges. The OFS framework for REITs and InvITs will be equivalent to the OFS framework for listed companies.
Sebi said the revised framework will take effect from February 9.
(Disclaimer: Recommendations, suggestions, views and opinions expressed by experts are their own. These do not represent the views of The Economic Times. )