Offer for sale enables a fair and transparent exchange facility for companies that wants to sell the newer & existing shares to raise capital from the market or for the promoters of the company to dilute their personal stock holdings and initiate wider public participation. The participants of OFS include – NRI’s, retail investors, Hindu undivided families (HUFs), etc.
WHAT ARE Benefits Of Investing In OFS
» Economical investment – With OFS there are no additional charges to be paid except for the regular transaction charge and the transaction tax for securities
» Transparency without any manipulation– It is highly transparent since it is carried out on a real-time bidding system, that cannot be manipulated
» Negligible paperwork – This process requires minimum paperwork due to its online system for application
» Accessible information prior to investment – OFS is available for already listed companies which enable investors to access all the necessary information before trading
» Ability to put multiple bids – This special facility is only available with OFS that allows the investor to put multiple bids over the set base price.
» Highly time efficient – Since it is an online process it requires little time and stocks can be allotted by T+1 days with ease
» Discounted stock pricing – Government offers discount up to 5% while selling PSU company’s shares tp retail investors
How to bid in OFS?
A company sets a nominal base price known as “floor price” for the shares offered in OFS, the interest buyers must bid in order to acquire these shares. Bidding prices must be higher than the set floor price, once the bids have been places – the shares to be sold are assigned to different buyers. Minimum limit is not an issue with OFS, a bidder may chose to bid for just one share as well.
How to apply for OFS?
OFS has different categories of buyers that participate in the share bidding. An individual investor can participate in the “Retail” category. Buyers must ensure that the bid total remains up to 2 lakh rupees and not more. The prerequisites for participating in OFS are – a demat and trading account, if you are an offline buyer you can place your bids through a recognized dealer.
HOW CAN ANS HELP YOU INVEST IN OFS?
» Quick and easy application process, helps you discover cut off price
» Trading across both NSE & BSE Platforms available, in order to provide your full range of exchange services.
» Allotment information in the Demat accounts via SMS service
» Telephonic inquiry service for the Demat balance
» Provides a platform to trade your OFS in the secondary market
» An individual can apply until last moment i.e 3:30 pm