The Securities and Exchange Board of India (SEBI), on Friday, revised the offer for sale (OFS) mechanism as the deadline is approaching for the promoters of listed companies to offload their stake to meet the minimum public shareholding norm of 25 per cent by June 2013.
“Based on past experience of sale of shares through OFS, the mechanism of OFS has been found to be useful by market participants and popular for offloading shares of promoters in listed companies in order to achieve minimum public shareholding,” said SEBI in a circular to all sock exchanges.
The revised norms would be “more economical, efficient and transparent,” it added.
The cumulative bid quantity will be made available online to the market throughout the trading session at specific intervals in respect of orders with 100 per cent upfront margin and separately in respect of orders placed without any upfront margin.
The indicative price shall be disclosed to the market throughout the trading session. This is also calculated based on all valid bid / orders.
Institutional investors have an option to pay either upfront 100 per cent margin in cash or without margin. However, non-institutional investors have to pay 100 per cent upfront margin in cash.
Orders with 100 per cent margin paid upfront by institutional investors and non-institutional investors can be modified or cancelled at any time during trading hours. Orders without paying upfront margin by institutional investors can not be modified or cancelled except make upward revision in the price or quantity. Institutional investors who placed orders / bids with 100 per cent margin upfront, custodian confirmation would be within trading hours and settlement shall take place on T+1 (trading plus one day) and without upfront margin it will be on T+1 and settlement will be on T+2 as it is now followed in secondary market transactions.
The extended half-an-hour time after trading hours given to the custodians earlier has been done away with.