The Securities and Exchange Board of India (SEBI) on Friday decided to ease the regulations related to the offer-for-sale of shares by non-promoters of companies.
In the new guidelines, the market regulator has removed the requirements of minimum shareholding for being permitted to sell shares through offer-for-sale. Before the announcement of the new regulations, non-promoter shareholders that hold at least a 10 per cent stake in a company are permitted to sell shares through the offer-for-sale route.
The SEBI board met in Mumbai on Friday. The board approved a number of proposals.
One of the most important decisions approved by the board is related to modifications with respect to the existing framework for Offer for Sale (OFS) through Stock Exchange Mechanism.
Currently, non-promoter shareholders holding at least 10 per cent of the share capital of the eligible company and willing to offer shares of at least Rs 25 crore are eligible to offer their shares through OFS mechanism.
It has been decided to do away with the requirement of a minimum 10 per cent shareholding for the non-promoter shareholders for offering shares through OFS mechanism, according to an official statement released the SEBI after the board meeting.
The existing cooling-off period of +12 weeks for OFS has been reduced to a range of +2 weeks to +12 weeks based on the liquidity of securities of such eligible companies.
Retail investors have been allowed to bid for the unsubscribed portion of non-retail segment.
OFS mechanism has been made available to unit holders/sellers of listed REITs / InvITs to offer their holdings.
These changes are aimed at bringing in more flexibility and efficiency to the OFS Framework, SEBI said.
The SEBI board also approved the proposal to mandate the issuers coming out with IPO, to make disclosure of Key Performance Indicators (KPIs) and price per share of issuer based on past transactions and past fundraising done by the issuer from the investors under ‘Basis for Issue Price’ section of the offer document, and in Price Band Advertisement.
Presently, Issuer companies, in addition to the audited financial numbers, also disclose their key numbers on various key performance metrics/indicators in different sections of DRHP which are not covered in the financial statements in the offer documents.