What is an Offer for Sale (OFS)?
An Offer for Sale (OFS) allows promoters or significant stakeholders (holding more than 10% shares) of a listed company to sell their existing shares directly to investors through the stock exchange. Unlike an IPO or FPO, no new shares are issued, and the total authorised capital remains unchanged.
Key points about OFS
- Initiated by promoters or large stakeholders.
- Total shares remain constant; no new shares issued.
- Typically used when the public shareholding is below regulatory norms (25%).
- Companies may offer shares at a discounted rate (approximately 5%).
Benefits of investing in OFS
- Opportunity to purchase shares at potentially lower prices.
- Access to established companies with potential for growth.
What if...
| Scenario | Resolution |
|---|
| Public holding below regulatory norms (25%) | OFS is typically used to increase public holding; investors can benefit from discounted prices. |
| Promoter selling at inflated valuation | Carefully evaluate the company's fundamentals before investing. |
Last updated: 26 Jun 2025
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