Leading stock exchange BSE has issued a new set of guidelines for bidding in the Offer for Sale segment, that requires companies to disclose their OFS plans two banking days in advance.
The new norms could lead to most OFS taking place on Mondays. Currently, the companies are required to give an advance notice of two trading days before the OFS, which the government has been saying gives scope for the speculators to beat down the share price of the disinvestment-bound PSUs.
The new norms would help reduce the gap between the disclosure of the OFS and the actual share sale in cases where the intermediate days include trading holidays when banks are open, such as Saturdays.
Giving an example, Sebi Chairman UK Sinha last month said that the notice for the OFS is currently required to be made on Thursday for a share sale taking place on Monday. The change in the norms to banking days, instead of trading days, would mean that the notice can be given on Friday evening as Saturday can be counted as an intermediate banking day.
As the notice can be issued on Friday evening, no trading can take place in the shares before the OFS begins on Monday morning, thus putting a check on any possible speculative trading that might take place.
However, there would be no material change in cases when the OFS takes place on days other than Mondays, barring some exceptions where banks are open on days closed for trading.
The exchange has made the necessary changes in the OFS module and has enabled the segment to all trading members on iBBS (Internet Based Book Building System) platform of the bourse, BSE said in a circular.
"All trading members are allowed to access the module. No separate registration or payment of any charges is required currently to access the OFS segment on iBBS," it added. The separate window would facilitate seller to dilute its holding in a transparent manner with wider participation.
In order to enhance retail participation in OFS process and to simplify the bidding process for retail investors, BSE said, "OFS notice shall continue to be given latest by 5 PM on T-2 days. However T-2 days shall be reckoned from banking day instead of trading day."
Besides, it would be mandatory for sellers to provide the option to retail investors to place their bids at cut off price in addition to placing price bids. Last month, capital markets regulator Sebi had issued the guidelines on the matter.
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