How is OFS price decided?

The allotment in OFS is decided on highest price priority. EG: OFS floor price: 100 Rs. OFS lowest price at which shares offered to Non-retail category: 100.5 Rs. But there can are bidders in retail category who bid at a price higher than 100.5.

What is OFS in NSE?

Offer For Sale(OFS) mechanism has been introduced to facilitate promoters to dilute/offload their holding in listed companies. A separate window is being provided by the Exchange for the same.

What is the effect of OFS on share price?

Retail investors are generally offered a discount on the floor price when they buy shares through OFS. The discount is around the range of 5\% in these offerings. The discounted price is one of the key benefits of investing through OFS for retail investors. The entire process of OFS is a system based bidding platform.

What is cut off price in OFS?

A cut-off price is the lowest price at which an investor is allocated shares during an OFS. This way, the investor can simply apply for shares at the cut-off price without worrying about price discovery at the time of bidding.

What is OFS and fresh issue?

Fresh Issue: This refers to the issuance of new equity shares in the company and selling those newly issued shares to the investors. Offer for Sale: Offer for sale means selling of shares by an existing promoter/investor of the company.

Is it good to invest in OFS?

When to invest in an OFS? Companies use the OFS route to raise additional capital and dilute promoters’ holdings. This is a much simpler process compared to other forms of raising money. It is ideal to invest in an OFS if the company has a good reputation and future growth potential.

What is cut off price for OFS?

Luckily for investors, there is another option available: the cut-off price option. A cut-off price is the lowest price at which an investor is allocated shares during an OFS. This way, the investor can simply apply for shares at the cut-off price without worrying about price discovery at the time of bidding.

Who can invest in OFS?

As an individual investor, you can apply in the retail category of the OFS. In this category, your total bid value should not exceed Rs 2 lakh rupees. Otherwise, it becomes ineligible. You also require a demat account and a trading account in order to participate in an OFS.

What is OFS in India?

An Offer for Sale is a simpler method wherein promoters in public companies can sell their shares and reduce their holdings in a transparent manner through the bidding platform for the Exchange. The OFS Mechanism was first introduced in the market by SEBI in 2012. …