FAQs on Offer for Sale
Offer for Sale (OFS) and Initial public offering (IPO) must be similar but have different features.
|Offer For Sale (OFS)
|Initial Public Offering (IPO)
|OFS is eligible for the top 200 companies based on the market cap.
|IPO is eligible for any company that wants to raise capital for the company’s growth and expansion.
|10% OFS shares are reserved for retail investors; 25% for mutual funds and insurance companies.
|35% of the company shares are reserved for retail investors.
|OFS can be completed in one single trading day.
|IPO can remain open for three to four days.
OFS by government companies is suitable investments since these are old companies, though the government is aggressive in pricing the OFS. Some discounts are offered to retail investors.
In the case of OFS by other companies, one needs to study and decide if it is a good investment then only invest in OFS.
OFS shares are allocated in two significant ways-
- Single Clearing Price: All the investors/ bidders are allocated the shares at the same price.
- Multiple Clearing Price: All the investors/ bidders are allocated the shares based on the price priority.
Another option for the OFS investor, apart from the above two, is the cut-off option. It is the lowest price at which the investor/bidder is allocated shares during the OFS process. The cut-off price for the investor makes it easy to apply for OFS shares without finding out the price discovery during the bidding time.
Any OFS investor can modify or cancel the order under OFS only during the offer period. There will be no modification/ cancellation of the OFS shares bid allowed during the last 30 minutes of the offer duration.
Since the OFS companies are already listed, there is plenty of liquidity in selling OFS on stock exchanges. However, you can always check on the liquidity on exchange before investing.
Floor price is the minimum price to apply for the OFS. Investors can not apply for OFS below the floor price.
The offer price is disclosed by seller a day before the shares are offered. It is disclosed between the closure of trading hours and the end of business hours of the stock exchanges
Investors will receive shares directly into their DEMAT accounts on the day of allotment, which is T+2. where T is the day of issue.
For Non allotted bid the exchange credit the money to Borker on T+2 basis. Once we get the same the same will be credit to client ledger on T+1 basis.
If you are Existing Customer, you Can visit on our website and in OFS section and apply online by making online payment. Existing Customer Can visit on our website and in OFS section he can apply online by making online payment.
If you are New Customer you Can open Trading account by filling One Time Account opening Form with Necessary Documents (PAN Card and Address Proof) afterwards he can invest online through us.
You can contact your relationship manger or our Customer service desk at HO.