Sebi plans to provide discount for retail investors in OFS

Enthused by robust response to OFS mechanism of selling shares by companies, market regulator Sebi plans to provide discount for retail investors in such share sales and allow a larger set of firms to tap this route.

Besides, Sebi is considering at least 10 per cent of the shares to be sold through the OFS mechanism to be revered for retail investors, while non-promoters may also be permitted to tap the route, officials said.

Offer-for-sale (OFS) route was introduced in February 2012 as a fast-track mode for sale of shares by promoters. Since then more than 100 companies have sold shares through this mechanism to mop-up close to Rs 50,000 crore.

As OFS has found to be very successful mechanism for share sale, Sebi has now decided to widen its ambit and the proposed changes likely to be discussed in the regulator's board meeting next week.

The Sebi's board will consider a proposal where a minimum of 10 per cent of the issue size would be revered for retail investors (those investors bidding for less than Rs 2 lakh). In case, this percentage is not fully utilised, the unutilised portion may be offered to other investors.

Besides, seller of shares may offer a discount to retail investors.

As per the proposal, non-promoters of listed firms will be allowed to sell their stake through OFS, which involves an auction of shares on stock exchanges during market hours.

Also, Sebi plans to to make OFS route available to the top 200 listed firms by market capitalisation. Currently, top 100 listed companies by valuation are allowed to tap the route.

The Securities and Exchange Board of India (Sebi) had introduced OFS mechanism to help listed private companies to comply with the minimum 25 per cent public shareholding norm and state-owned firms meet the requirement of 10 per cent public-float.

Securities and Exchange Board of India ( SEBI )