Boost for govt’s ambitious disinvestment programme as regulator cuts advance notice period for Offer For Sale to one day and allows retail investors to place their bids a day later for such share sales
New Delhi : In a move that may give a boost to the PSU disinvestment plans, the Securities and Exchange Board of India agreed to the government’s suggestion for cutting advance notice period for Offer For Sale to one day and allowed retail investors to place their bids a day later for such share sales.
Currently, listed companies must give an advance notice for share sales through the OFS route two banking days in advance, while bids need to be placed by retail as well as non-retail investors in a single day during market hours.
The Department of Disinvestment has been demanding that the advance notice should be allowed till evening of the day before OFS, as share prices of many PSUs appeared to get hammered down due to longer notice. The government is far behind its disinvestment target of Rs 69,500 crore set for the current fiscal.
The market regulator has been of the view that retail investors need to be given more time to arrange funds to participate in the OFS, which was introduced a few years ago as an easy and faster route for sale of shares by already-listed firms to public shareholders.
To address all these concerns, Sebi has now decided to allow retail investors to place their bids a day later while the companies would be allowed to notify the stock exchanges about their intention for sale of shares latest by 5 pm a day before the day of the OFS.
Only non-retail investors will be permitted to place their bids on the first day of the OFS through stock exchanges, while retail investors can bid on T+1 day and may place a price bid or opt for bidding at cut off price.
T refers to the day of the OFS. Settlement for bids received on T+1 day will take place on T+3 days.
In case of any discount to retail investors, the same will be applicable to bids received on T+1 day.
