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Below Quote on Comprehensive Framework on Offer for Sale (OFS) of Shares through Stock Exchange Mechanism By Mr. Jimeet Modi, Founder & CEO, SAMCO Group

Mumbai: January : Sebi has come out with a new comprehensive framework for OFS through Stock Exchange (SE) mechanism. The fundamental change is that non-promoter shareholders who want to sell stake valuing more than Rs 25 crore can also use the OFS window of the SEs, which was so far available only to the Promoters.

Now this Sebi decision is expected to have two major implications largely; So far what use to happen that large institutional but non-promoter shareholders who were holding say 5-7-8 per cent of the equity could not avail the facility of this OFS mechanism. As the OFS facility was not available to these non-promoter-institutional shareholders, they had to rush to accelerated Block deals via Brokers, where they had to absorb deep discounts in selling prices.

The first benefit that will accrue to the large non-promoter shareholders who will be able to sell larger blocks of shares at a better price.

This move will also help the retail investors in a big way. So far, what use to happen, when institutional investors were selling through negotiated blocks via brokers, retail investors had no ways to participate and buy such stocks even though it was available at a discount. As these deals with discounts were executed through block window, it was not available to retail investors in the earlier set up, but now the field has been levelled and if retail investors wish to participate in such deals, they will not miss the Bus of discounted price.

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