BSE OFS Platform Gains Wider Popularity

Every now and then you will come across new concepts, terms and phrases which become a norm of referring to a particular phenomenon. One such term with reference to the equity markets is OFS which in expanded form stands for an Offer For Sale. It is a relatively new route as allowed by the SEBI to companies which intend to sell a stake in the open market. It was particularly introduced with the disinvestment process in mind whereby the government could sell stakes in PSUs. While this was the primary motive, it was also extended to companies which were, by law, required to bring up their public shareholding to 25 per cent or more. The main advantage of the OFS route was that it helped companies sell their stakes in a day flat and at prices determined a day in advance. The route is primarily open to promoters who could sell their stake in the offer for sale.

BSE, has witnessed a good response to its OFS platform from the corporates. A total of 24 OFS issues have come to the Exchange so far indicating the popularity of the platform named iBBS (Internet Based Book Building). This platform went live on 24th February, 2012 and was implemented and launched by BSE in August 2012 in line with the SEBI guidelines for OFS.

The iBBS has gained wider popularity among corporates, traders and investors. Its success can be gauged from the way many promoters of frontline companies have come to it in order to offload their stakes. Recently, Adani Enterprises and Arohi Commercials successfully completed their OFS using the BSE OFS platform. Adani Agro the promoters of Adani Enterprises recently garnered as much as Rs 189 crore from an OFS. The issue comprised of 8500000 equity shares of face value of Re 1 issued at a price of Rs 221 per share.

In another instance, Arohi Commercials offloaded 5.8 lakh shares worth Rs 1.9 crore through this platform. Both the OFS got fully subscribed even in the current volatile markets.

The divestment process for PSUs has also gone through smoothly on this platform. A total 5 PSUs have issued shares through the OFS route on the BSE OFS platform. The most important one was the mega OFS of NTPC through which the government offloaded its holding and garnered around Rs11500 crore. As more divestments get lined up this fiscal and with a promoters in a number of corporates looking at reducing their stake to comply with the minimum public shareholding norms the OFS volumes through iBBS in future are sure to see a smart spurt.