1. What is an Offer For Sale (OFS)?
An Offer For Sale is a mechanism that allows promoters or major shareholders of a publicly listed company to sell their shares directly to the public.
2. How does OFS differ from IPO?
While an Initial Public Offering (IPO) is for companies going public for the first time, an OFS is for shareholders of an already public company to sell their existing shares.
3. Who can use the OFS method?
It’s typically used by government or private promoters in public companies to reduce their holdings.
4. What is the process of an OFS?
In an OFS, shares are offered in a dedicated window on the stock exchange, allowing retail and institutional investors to place bids.
5. How is the price for OFS shares determined?
The seller may set a floor price, and investors bid at or above this price. The final price is often determined by the bids received.
6. What are the advantages of an OFS?
OFS is quicker and less cumbersome compared to other selling methods, offering a transparent and efficient way for promoters to reduce their holdings.
7. Who can participate in an OFS?
Qualified institutional buyers, retail investors, and sometimes company employees can participate in an OFS.
8. How does OFS impact the stock price?
The impact varies; it can lead to a temporary decrease in stock price due to increased supply of shares.
9. Is there a reservation for retail investors in an OFS?
Yes, often a portion of the OFS is reserved for retail investors, offering them a chance to participate directly.
10. Can OFS be used for disinvestment by governments?
Yes, governments frequently use OFS to sell their stakes in public sector enterprises to meet disinvestment targets.
