Thursday, 24 July 2014

Investors with over 10% stake may get to take the OFS route .

The Securities and Exchange Board of India is likely to allow only those large investors — owning more than 10% stake in top 200 companies by market capitalisation — to sell their stake through the offer-for-sale (OFS) route. The move could be a major relief to private equity funds struggling to exit listed companies but would be restrictive to the ones with small holdings, said analysts. Sebi is likely to issue a circular this week on the eligibility criteria for non-promoter shareholders, framework for offering discount and other risk-management measures, said a person familiar with the development.

"Small shareholders won't be able to use the OFS route as they can sell through the normal trading window," said Prithvi Haldea of New Delhi-based Prime Database. Non-promoter shareholders with significant holding such as private equity, venture capital funds and LIC would be able to sell their stake through this cost and time efficient platform. 


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