What Is an Offer for Sale (OFS) and How Does It Work?
An Offer for Sale (OFS) is a mechanism that allows promoters or significant shareholders (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 — the company’s authorised capital remains unchanged.
OFS helps companies comply with the minimum public shareholding requirement (25%) while giving investors a chance to buy shares—often at a discount determined by the issuer as the floor price.
Key Points About OFS
- Initiated by promoters or large shareholders.
- No new shares are created; the overall share capital stays the same.
- Commonly used to meet the 25% minimum public shareholding requirement.
- Issuers may offer a discount to encourage participation (subject to the issue terms).
How Does the OFS Process Work?
- Place a bid via the OFS portal. The required margin is immediately blocked in your FYERS trading account.
- Exchange confirmation is done based on your bid price and quantity; allotment is determined by the exchange.
- Margin reversal & debit: once allotment is confirmed, the blocked margin is reversed and the actual amount for allotted shares is debited.
- Ledger reflection: your ledger will show the margin reversal and the final debit entry corresponding to the OFS purchase.
Margin blocking, reversal, and final debit typically occur on the same trading day, subject to exchange confirmation.
What If...
| Scenario | Resolution |
|---|
| Public holding below 25% regulatory norm | OFS is used to raise public holding; issue terms may include a discount (as defined by the issuer). |
| Promoter selling at an inflated valuation | Assess company fundamentals and issue terms carefully before bidding. |
| Partial or no allotment | Blocked margin is reversed proportionally or fully on the same day. |
| Delayed exchange confirmation | Reversal/debit entries are posted as soon as FYERS receives exchange confirmation. |
Last updated: 03 Oct 2025
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