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TMI BlogComprehensive guidelines on Offer For Sale (OFS) of Shares by Promoters through the Stock Exchange MechanismX X X X Extracts X X X X X X X X Extracts X X X X ..... This has reference to circular no. CIR/MRD/DP/05/2012 dated February 1, 2012, CIR/MRD/DP/07/2012 dated February 23, 2012 and CIR/MRD/DP/8/2012 dated February 27, 2012 on the captioned subject. Several representations/suggestions have been received from the market participants on few provisions of the above circulars. After due examination and deliberation with the market participants it has been decided to replace the procedures and instructions contained in the aforementioned circulars by the following: 1. Eligibility (a) Exchanges The facility of offer for sale of shares shall be available on Bombay Stock Exchange (BSE) and National Stock Exchange (NSE). (b) Sellers (i) All promoter(s)/ promoter group entities ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a price priority methodology. (c) Indicative Price is the volume weighted average price of all the valid/confirmed bids (d) Floor Price is the minimum price at which the seller intends to sell the shares. 3. Size of Offer for sale of shares The size of the offer shall be a minimum of ` 25 crores. However, size of offer can be less than ` 25 crores so as to achieve minimum public shareholding in a single tranche. 4. Advertisement and offer expenses (a) Advertisements about the offer for sale of shares through stock exchange(s) , if any, shall be made after the announcement/ notice of the offer for sale of shares to the stock exchanges in accordance with para 5 (b) below and its contents shall be restricted to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rket. Alternatively, a declaration to the effect that the floor price will be submitted to the DSE in a sealed envelope that shall be disclosed post closure of the offer. (viii) Conditions, if any, for withdrawal or cancellation of the offer. (c) Floor price (i) In case the seller chooses to disclose the floor price, the seller(s) shall declare it after the close of trading hours and before the close of business hours of the exchanges on T-1 day else the seller(s) shall give the floor price in a sealed envelope to DSE before the opening of the offer. (T day being the day of the offer for sale) (ii) The floor price if not declared to the market, shall not be disclosed to anybody, including the selling broker(s). (iii) Seal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this window. (iv) In case of shares under offer for sale, the trading in the normal market shall also continue. However, in case of market closure due to the incidence of breach of Market wide index based circuit filter , the offer for sale shall also be halted. (v) Only limit orders/ bids shall be permitted. (vi) Multiple orders from a single buyer shall be permitted. (vii) In case floor price is disclosed, orders/ bids below floor price shall not be accepted. 6. Risk Management (a) Clearing Corporation/ Clearing house shall collect 100% of the order value in cash from non-institutional investors at the order level for every buy order/ bid. Institutional investors shall have an option to pay either 25% of the order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... panies shall be allocated more than 25% of the size of offer for sale. (e) The allocation details shall be shared by the DSE with the other exchange after the allocation is crystallized. 8. (i) Settlement a. The allocation and the obligations resulting thereof shall be intimated to the brokers on T day. b. The settlement shall take place similar to trade for trade basis and shall be completed on T + 1 day. There shall be no netting of settlement at broker s end. c. Funds collected from the bidders who have not been allocated shares shall be released after the download of the obligation. d. On T+1 day, to the extent of obligation determined, the clearing Corporation/ Clearing house of DSE shall transfer such number of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... will be a cooling off period of 10 trading days from the date of withdrawal before an offer is made once again. The stock exchange(s) shall suitably disseminate details of such withdrawal. 11. Cancellation of offer Cancellation of offer shall not be permitted during the bidding period. If the seller(s) fails to get sufficient demand at or above the floor price, he may choose to either conclude the offer or cancel it in full. The seller may also choose to conclude the offer or cancel it in full, in case of defaults in settlement obligation. 12. This circular shall supersede the circulars no. CIR/MRD/DP/05/2012 dated February 1, 2012, CIR/MRD/DP/07/2012 dated February 23, 2012 and CIR/MRD/DP/8/2012 dated February 27, 2012. 13. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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