17 January, 2019
On December 28, 2018, SEBI reviewed the Offer for Sale (OFS) framework and issued the revised framework with certain modifications. Considering that the OFS mechanism has been successfully used to divest stake by promoters and large shareholders of top 200 companies by market capitalization, market representations indicated that its use may be extended to a wider set of companies.
Further, market feedback indicated that clarity may be brought in conditions relating to cancellation of OFS in light of modifications to framework carried out vide circular dated February 15, 2016. Accordingly, the OFS framework is modified as follows:
a) OFS mechanism shall be available to companies with market capitalization of Rs.1000 crores and above, with the threshold of market capitalization computed as the average daily market capitalization for six months period prior to the month in which the OFS opens.
B) If the seller fails to get sufficient demand from nonretail investors at or above the floor price on T day, then the seller may choose to cancel the offer, post bidding, in full (both retail and non-retail) on T day and not proceed with offer to retail investors on T+1 day.
For further information, please contact:
Vineet Aneja, Partner, Clasis Law
vineet.aneja@clasislaw.com
