What is an Offer for sale?
An Offer for sale is a mode whereby promoters and/or large institutional investors sell their holdings in companies via the stock exchange bidding mechanism. The OFS mechanism enables a market-driven transparent bidding process.
How can I apply for shares in OFS?
You would need a SAMCO trading and demat account to invest in an OFS. In order to place a bid in an ongoing offer for sale, clients should raise a ticket with the SAMCO Support Help desk – Trading and Dealing support giving relevant details about client code, bid quantity, bid price, etc. Within 30 minutes of raising a Support ticket, client’s shall receive a call from the SAMCO Dealing team confirming the details of their bid. On verification, the bid shall be placed.
OFS bids require 100% cash margin. In case your account does not have adequate case margin – your bid shall be rejected. In case your bids are accepted, the relevant margin from your trading account will be deducted. For Eg. if your trading account had a margin of Rs. 5,00,000 and you made a bid for Rs. 1,60,000 then your normal SAMCO trading account margin would be reduced to Rs. 3,40,000 and Rs. 1,60,000 would be allocated to your OFS bid.
What is discount for retail investors in OFS?
Retail investors are sometimes offered a discount on the floor price, especially in PSU OFS’. The discounted price is one of the key reasons to buy shares during an OFS and not from the secondary market.
How much can retail investor apply for in OFS?
Retail investors can apply for an amount up to Rs. 2,00,000 in case of OFS. In case the bids exceed Rs. 2,00,000 then the bids shall not be in the retail category but in the Non – Institutional Investor category.
What kind of order can be placed for applying in OFS?
Only Limit Orders can be placed while bidding for OFS.
What is floor price in OFS and what is its importance?
Floor price can be defined as lowest price price at which bids can be made in an OFS. Any bids placed below the floor price will be rejected. It is not mandatory that the floor price is always disclosed. Where floor price is not announced, there is no price band applicable for the orders placed under OFS.
What are expenses and charges applicable in OFS?
The following charges are applicable for an OFS – Securities Transaction Tax STT, Exchange Transaction Charges and Brokerage.
When are shares received in Demat account in case of OFS?
Successful bidders shall receive shares in their DEMAT account on allotment on T+2 day, where T is the day of OFS issue.
When shall funds be released in OFS?
In case shares are not allocated to bidders, funds shall be received on T+1.
Watch this video to understand what is OFS
Additional Help Links