Offer For Sale Tool | OFS Software

Why choose Meon OFS Solutions?

We offer an offer-for-sale system that is a cost-effective, efficient, and transparent way for promoters and existing shareholders to sell a part of their shareholding in the listed company to raise funds. It is flexible, helps in the quick execution of the transaction and avoids time-consuming tasks such as the lengthy process of filing a draft offer document and getting the document approved by SEBI.

OFS ( Offer For Sale)

An OFS is a perfect method for a company's owner to sell their existing shares directly to the public and secure funds without issuing new shares.

Enhanced Visibility

Conducting an Offer for Sale can enhance the visibility and profile of the company in the financial markets, attracting more investor attention.

Diversification Opportunities

Investors can use Offers for Sale to diversify their portfolios by investing in shares of different companies and across various sectors.

Diverse Investor Base

An Offer for Sale attracts a broad spectrum of investors, including retail, institutional, and potentially international investors.

How Does an Offer For Sale Tool Work?

In an offer for sale(OFS), the promoters receive the sale proceeds. The company must inform the exchange two days before an offer for sale.

An offer for sale is publically open for only one trading day.

Only 10% of the issue size is reserved for retail investors.
No new shares are issued during this offer.
Prior approval of market regulators isis optional in this process.
Investors can subscribe to an offer for OFS only through a broker.

Reasons for an Offer For Sale

Promoters are owners of the company who invest their money, time, and efforts to make a company. They offer their shares for various reasons, such as

Government Regulations

A promoter can have up to 75% shareholding in the list company. According to SEBI, if a company has an 80% stake in the company, it will offer 5% shares to the public via this medium.

Personal Reasons

An emergency fund may need to company promoters anytime during emergencies. It is a valid reason to offer their shares to initiate an offer for sale.

Diversification

It may relate to profit booking by the company's owner. They can use their funds in other businesses to diversify their overall portfolio.

Strategic Reasons

Promoters might sell shares as part of a strategic move, such as entering into a strategic partnership with a specific business plan.

Unlocking Value

Promoters may believe that their shares are undervalued in the market. They can unlock value by selling their shares at a higher price and realizing a profit.

Frequently Asked Questions

Q: What is an Offer for Sale (OFS)?

A: An Offer for Sale is a method through which existing shareholders of a company can sell their shares to the public. It's a way for these shareholders to divest their holdings and allow others to buy them on the stock exchange.

Q: Who can participate in an OFS?

A: Retail and institutional investors can participate in an OFS. However, there are separate quotas and pricing mechanisms for each category, typically with a higher discount for retail investors.

Q: How is the price of shares determined in an OFS?

A: The floor price, or the minimum price at which shares can be sold, is determined by the seller (promoter or shareholder). The final price is often discovered through a bidding process where investors indicate their willingness to buy at a specific price.

Q: What are the advantages of participating in an OFS?

A: It provides an opportunity to buy shares directly from existing shareholders, and retail investors may receive a further discount.

Q: Are there any risks associated with participating in an OFS?

A: Yes, there are risks, including market volatility and the possibility that the final price may not match your bid. It's essential to understand the company's financial health and prospects before participating in an OFS.

Promoters Sell their Shares and Reduce Their Holdings