Review of Offer for Sale (OFS) of Shares through Stock Exchange Mechanism
Summary
This circular modifies the Offer for Sale (OFS) framework to extend eligibility to companies with a market capitalization of Rs. 1000 crores and above. It introduces a provision allowing sellers to cancel an OFS if sufficient demand from non-retail investors is not met at or above the floor price on T day. Stock Exchanges are instructed to implement these changes by updating systems, bye-laws, and disseminating information to member brokers.
Text
OFS mechanism shall be available to companies with market capitalization of Rs.1000 crores and above, with the threshold of market capitalization computed as the average daily market capitalization for six months period prior to the month in which the OFS opens.
If the seller fails to get sufficient demand from non-retail investors at or above the floor price on T day, then the seller may choose to cancel the offer, post bidding, in full (both retail and non-retail) on T day and not proceed with offer to retail investors on T+1 day.
Stock Exchanges are advised to take necessary steps and put in place necessary systems for implementation of above; make necessary amendments to the relevant bye-laws, rules and regulations for the implementation of the above; bring the provisions of this circular to the notice of the member brokers of the stock exchange and also to disseminate the same on their website.
This circular is issued in exercise of the powers conferred under Section 11(1) of the Securities and Exchange Board of India Act, 1992.
Source: SecMarx — Review of Offer for Sale (OFS) of Shares through Stock Exchange Mechanism. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.