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TMI BlogOffer For Sale 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 ..... isted companies in a transparent manner with wider participation, it has been decided to allow the offer for sale of shares by promoters of such companies through a separate window provided by the stock exchange(s). The guidelines for the same are as under: 1. Eligibility (a) Exchanges To begin with, 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 of such companies that are eligible for trading and are required to increase public shareholding to meet the minimum public shareholding requirements in terms Rule 19(2)(b) and 19A of Securities Contracts (Regulation) Rules, 1957 (SCRR), rea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... achieve minimum public shareholding in a single tranche. Note: Specified date shall be the last trading day of the last completed quarter 4. Advertisement and offer expenses (a) Advertisements about the offer for sale of shares through stock exchange(s) shall be made after the announcement/ notice of the offer for sale of shares has been made to the stock exchanges in accordance with para 5 (b) below; (b) All expenses relating to offer for sale of shares through stock exchange(s) shall be borne by the seller(s). 5. Operational Requirements (a) Appointment of Broker The Seller(s) would have to appoint Sellers‟ broker(s) for this purpose. The Seller‟s broker(s) may also undertake transactions on behal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e if not declared to the market, shall not be disclosed to anybody, including the selling broker(s). (iv) Sealed envelope shall be opened by the DSE after the closure of the offer for sale and the floor price suitably disseminated to the market. (d) Timelines (i) The duration of the offer for sale shall not exceed one trading day. (ii) The placing of orders by trading members shall take place during trading hours. (e) Order Placement (i) A separate window for the purpose of offer for sale of shares shall be created by stock exchanges. Modification/ Cancellation of orders/ bids will be allowed during the period of the offer. However, modification/ cancellation of orders/ bids shall not be allowed during the last 30 mi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the commencement of the offer. No other margin shall be charged on the seller(s). 7. Allocation (a) Minimum of 25% of the shares offered shall be reserved for mutual funds and insurance companies, subject to allocation methodology. Any unsubscribed portion thereof shall be available to the other bidders. (b) The orders shall be cumulated by the DSE immediately on close of the offer. Based on the methodology for allocation to be followed as disclosed in the notice, the DSE shall draw up the allocation. i.e. either on a price priority (multiple prices) basis or on a proportionate basis at a single clearing price. (c) No allocation will be made incase of order/ bid is below floor price. (d) No single bidder other than mutual ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmitted 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. 12. Stock Exchanges are advised to: . a. take necessary steps and put in place necessary systems for implementation of the above. b. make necessary amendments to the relevant bye-laws, rules and regulations for the implementation of the above decision. c. bring the provisions of this circular to the notice of the member brokers of the stock exchange and also to disseminate the same on the website. d. communicate to SEBI, the status of implementation of the provisions of this circular in the Monthly Development Report. 13. This circular is being i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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