How much can an investor invest in one company's OFS under the retail category?

At the time of bidding, an investor can invest up to Rs. 2 lakhs under the retail category in one company's OFS.

In which category can I bid?

Individual retail investors will have the option to bid in the retail category and the general category, which isnon-institutional investor (NII). However, if the cumulative bid value of such investors exceeds Rs. 2 Lakhs, the bids in the retail category will become ineligible.

Is there a maximum amount of application?

To be treated as a retail investor and to get a rebate of 5% (if there is rebate in the issue), the maximum amount is Rs. 2,00,000. You can apply for more than Rs. 2,00,000 and still be in the retail investor category and be part of the retail quota, but 5% rebate will not be available to you.

Is the cut off price for retail and NII categories different?

The cut off price will be determined separately for bids received in the retail category and non-retail category.

What do you mean by floor price under OFS? Is it mandatory for the issuer to disclose the floor price?

Floor price can be defined as a minimum price at which you can apply under OFS. Any order placed below the floor price, will not be accepted. It is not mandatory for the seller to disclose floor price. In cases where floor price is not disclosed, there will be no price band applicable for the orders placed under OFS.

How do I determine the price to apply and assure allotment?

Some issues permit you to apply at a cut off price.This will improve your chances of allotment since you will not make the mistake of bidding below the cutoff price or at a price at which maximum bids are received.

Can I directly apply for OFS on an exchange platform?

You will have to go through a broker to apply for OFS. Registration with a broker is mandatory for submitting bids. Further, you will need a PAN registration as well as Depository ID. If you wish to register with us, please call on 022-28584545.

What is the amount to be paid for applying to OFS?

The shares you have bid for multiplied by bid price should be paid to the broker 100% in advance. You can also utilize credits lying in your ledger account with the broker. Payment gateway options are available for direct transfer of funds. Moreover, OFS payments can be made through credit cards. In the event you wish to regularly subscribe to OFS , you can give a NACH mandate in favour of the broker so that funds can be collected from your account as and when you wish to subscribe to any OFS issue.

If an investor buys shares through OFS, does he/she get a discount?

Retail investors may be offered a discount on the floor price, especially in OFS of PSU companies. The discounted price is one of the key reasons to buy shares during an offer for sale compared withbuying sharesfrom the secondary market. You can read the OFS prospectus for details of discount in specific OFS.

How much of the entire issue is reserved for retail investors?

According to SEBI guidelines, a minimum of 10% of the offer is reserved for the retail category. PSUs may offer up to 20% reservation for retail investors.

How can I invest/participate in OFS?

You would need a trading and demat account to invest in OFS. You can invest/participate in OFS with the help of your Investmentz.comtrading account. Online customers can login to their trading account and place bids under "OFS" section of our website . Offline customers can place their bids with the help of their assigned dealer.

Under OFS, who can be defined as sellersand buyers?

Under OFS, promoters of the company who wish to dilute/offload/sell their holdings are the sellers and the broad market participants such as individuals, corporates, QIBs, HUF, and FIIs represent the buyers.

Can I also trade under the normal equity segment in stocks, which are eligible for Offer for Sale?

Yes, you can continue trading under the normal equity segment for stocks available under offer for sale on the day of such an offer.

Can I place market and limit orders under this facility of Offer for Sale?

You can place only a limit order under the Offer for Sale facility since market orders are not allowed.

Where can I view the details of the company coming up with OFS?

Unlike IPO/FPO, the seller of the issue under OFS does not release Draft Red Herring Prospectus listing company and issue details. However, you can view the details such as name of the company, seller name, bidding date, period, and floor price on the exchange website.

What is the advantage of OFS over traditional Follow-On Public Offer?

Unlike IPO/FPO, the seller of the issue under OFS does not release Draft Red Herring Prospectus listing company and issue details. However, you can view the details such as name of the company, seller name, bidding date, period, and floor price on the exchange website.

What is the advantage of OFS over traditional Follow-On Public Offer?

Following are the advantages of OFS compared with FPOs:
  • Involves least amount of paper work since it is a system-based bidding platform
  • Less time consuming due to automation andthe process involved
  • Minimum spread between application and allotment of shares
  • Cost effective
  • Convenient

What are the charges applicable to me under OFS?

There are no additional charges to place your bids under OFS. Transaction charges, STT,and other charges, which are currently levied under the equity segment, would be applicable for the OFS segment.

How will the shares be allocated under OFS and by when will I receive allotment?

Investors would receive shares directly into their demat account on allotment on T+2 basis, where T is the day of issue.

In case of non-allotment, by when will I receive my funds?

Funds collected from the bidders who have not been allocated shares will be released on T+1 basis, where T is the day of issue.

Since I can invest in OFS through my existing trading account, can I place my bids under OFS against stock margin available in my trading account?

You cannot place your bids under OFS against stock margin available in your trading account. Every bid/order should be backed by 100% cash margin. The funds allocated for OFS will not be utilized against any other obligation of the trading member or co-mingled with other segments.

What is the period of issue under OFS and duration during which I can place my bids?

The issue period under OFS will not exceed one trading day. You can place your bids as per the timelines defined by your broker.

Can I modify/cancel my order under OFS?

Yes, you can modify/cancel your bids during the offer period. However, no modification or cancellation will be allowed during the last 30 minutes of the offer duration.

Can I buy and sell shares through the Offer for Sale facility?

Only BUY bids of eligible stock are allowed under the Offer for Sale facility.

What will happen to the issue under OFS in case of market closure due to the incidence of breach of 'market wide index based circuit filter'?

In case of market closure due to the incidence of breach of 'market wide index based circuit filter', the Offer for Sale will be halted like regular trading. Further, if the OFS market closes during the cooling period, there will not be any extension of the issue period under OFS.

Is there any restriction on number of bids from a single buyer?

Under OFS, there is no restriction on the number of bids from a single buyer.