Offer For Sale of Shares by Promoters through the Stock Exchange Mechanism
Summary
This circular establishes a separate window mechanism for promoters to sell shares through stock exchanges to facilitate transparent dilution. It outlines eligibility criteria for sellers, operational requirements including order placement and floor price mechanisms, and risk management protocols. The document details allocation rules, settlement procedures, and obligations for stock exchanges to implement these guidelines.
Text
To begin with, the facility of offer for sale of shares shall be available on Bombay Stock Exchange (BSE) and National Stock Exchange (NSE).
All promoter(s)/ promoter group entities... required to increase public shareholding... or top 100 companies based on average market capitalization...
All investors registered with the brokers of the aforementioned stock exchanges other than the promoter(s)/ promoter group entities.
Defines Single Clearing Price, Multiple Clearing Prices, Indicative Price, and Floor Price.
The size of the offer shall be atleast 1% of the paid-up capital of the company, subject to a minimum of Rs 25 crores.
Advertisements about the offer for sale of shares through stock exchange(s) shall be made after the announcement/ notice of the offer for sale of shares has been made to the stock exchanges...
All expenses relating to offer for sale of shares through stock exchange(s) shall be borne by the seller(s).
The Seller(s) would have to appoint Sellers’ broker(s) for this purpose.
Seller(s) shall announce the intention of sale of shares at least one clear trading day prior to the opening of offer, along with specified information including name, exchange, date, methodology, quantity, broker, floor price, and withdrawal conditions.
Seller(s) may declare a floor price publicly or submit it in a sealed envelope to DSE before opening; if sealed, it shall not be disclosed to anyone including selling broker until post-closure.
The duration of the offer for sale shall not exceed one trading day.
A separate window shall be created; modification/cancellation allowed except last 30 minutes; indicative price available online; no price bands; only limit orders permitted; multiple orders from single buyer permitted.
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Source: SecMarx — Offer For Sale of Shares by Promoters through the Stock Exchange Mechanism. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.