The Securities and Exchange Board of India (SEBI) on 25 January 2013 revised the mechanism of the Offer for Sale (OFS). The board took the decision of revising the norms because the deadline for the promoters of the listed companies to offload their stake for meeting the minimum public shareholding norm of 25 percent by June 2013 is approaching.
These revisions would make the norms much more efficient, transparent and economical. The quantity for cumulative bidding would be made available online for the market across the trading session at different intervals to take care of the orders that carries 100 percent upfront margin and also of the orders which have been placed without the upfront margin. The indicative price of the market would be disclosed for the market across the trading session and is calculated on the basis of bids and orders.
Mode of Payments
For institutional investors their exists an option of paying the upfront margin in cash or without margin is available
The non-institutional investors it is mandatory to pay in cash the 100 percent of upfront margin
The upfront margin paid by both the institutional and non-institutional investors can be cancelled or modified up to 100 percent even during the trading hours
Institutional investors would not be able to modify or cancel their orders until they pay their upfront margin but they can make upward revision of the price or quantity
Provisions available for Institutional Investors
• The investors who have placed their bids or orders with 100 percent upfront margin, they can take the custodian confirmation within trading hours, with provisions of settlements within T+1 (trading plus one day) and in case of trading without upfront margin it can be done on T+1 and settlement can be on T+2 as it would be followed by the secondary market transactions.
The facility of extended half-an-hour after trading hours that was given to the custodians previously has been omitted.