An OFS (Offer for Sale) is a mechanism in the stock market where promoters or large shareholders of a listed company sell their shares to the public, typically to meet regulatory requirements or to raise capital.
This mechanism, introduced by SEBI in 2012, is primarily used to help promoters reduce their holdings and comply with regulatory requirements, such as maintaining a minimum public shareholding of 25%.
Unlike an IPO or FPO, an OFS does not involve the issuance of new shares but simply a transfer of ownership. The process is quick, typically conducted over a single trading day, and is open to a wide range of investors, including institutions, mutual funds, and retail investors, with a specific portion often reserved for retail participation.
Why These Two Companies Have to Come Up With an OFS
SEBI mandates that listed companies maintain a minimum public shareholding (MPS) of 25 percent. This means promoters and promoter groups cannot hold more than 75 percent of the total equity after listing or after any further capital raising.
PSU Banks that are Bank of Maharashtra and UCO Bank have a deadline of August 2026 to meet the SEBI norms for a minimum public shareholding (MPS) of 25 percent
In Bank of Maharashtra, the promoter shareholding currently stands at 79.60 percent, down from 86.47 percent in the previous year. While this marks a significant reduction, the bank is still required to further bring down the promoter stake by 4.60 percent to comply with SEBI’s minimum public shareholding norm of 25 percent.
In UCO Bank, the promoter shareholding currently stands at 90.95 percent, down from 95.39 percent in the previous year. While this marks a significant reduction, the bank is still required to further bring down the promoter stake by 15.95 percent to comply with SEBI’s minimum public shareholding norm of 25 percent.
Written By Abhishek Das
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Dailyraven Technologies or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
