In India, the stock market is believed to provide adequate opportunities to investors and traders trading online. However, even private businesses can step in and make use of all the options open to them. Among these methods of raising capital in the stock market, you may have heard of Initial Public Offer (IPO) or Follow-on Public Offer (FPO). However, OFS, meaning an Offer for Sale, is yet another means through which businesses can raise capital for their company’s operational needs.
Published on 01 March 2023
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In the stock market, private companies can opt to raise additional funds through an IPO, where the shares are sold publicly or to investors outside the company. The capital that the company gains through this process is used to grow or expand the business.
However, at times, even the capital from an Initial Public Offer may not suffice to meet these goals; this is when the company may choose to have an Offer for Sale (OFS). It is also to be noted that an OFS is open only to the top 200 companies based on market capitalisation. And with this, let’s find out more about what an OFS is.
OFS Meaning: What is an Offer for Sale?
In the case of an OFS, a company’s promoters or the key shareholders of the firm dilute their stake and sell their shares on the exchange. Once these shares are for sale, they are open to other companies, retail investors, Qualified Institutional Buyers (QIBs) and Foreign Institutional Investors (FIIs) for bidding.
If you are trading online, it is essential to have a demat (dematerialisation) account and a trading account with a reliable stockbroker. When it comes to understanding the Offer for Sale meaning in the stock market, it is a cost-effective way to invest in equity.
Unlike an IPO, where you have to apply for shares in lots, an Offer for Sale lets you apply for a single share if you want to do so, as there is no minimum limit for participating in an OFS. It is necessary for the investor/buyer to place a bid before they can obtain the shares. Also Read: F&O Stock List with Lot Size
The company that is selling the shares fixes a floor price, below which no bids can be placed. After all the bids have been placed, the shares are allotted to various buyers.
More about OFS and its meaning
An OFS can be a sensible investment if the investor is aware of the company’s reputation and its future growth potential. Since an FPO does not involve creating fresh shares and only dilutes a promoter’s stake in a company, the OFS can be carried out in a single session when trading online, unlike an IPO or FPO, which are long processes. The lack of excessive paperwork is another reason why an OFS consumes less time.
When it comes to the cost-effectiveness of an OFS, trading in these shares is considered to be quite economical for investors. Retail investors can get a discount of about 5% on the floor price when they purchase the shares while trading online.
Moreover, there are no additional charges incurred when an investor places their bid. Only the Securities Transaction Charges (STT) and the regular transaction charges are applied to the OFS bid as these taxes are applicable for all equity investments.
To conclude
It can be said that investing in an OFS has its own set of advantages since the hassle of documentation is absent from the process. One only needs to specify the price and quantity of the OFS issue when trading online.
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Day trading, also known as intraday trading, is the process of buying and selling securities in the stock market on the same day through a margin account. The objective of day trading online is to lock in profits from the movement of stock prices.
If there is one thing the stock market does almost like clockwork, it is swing. Not only do the prices of different stocks in the market keep fluctuating, but so do the corresponding fortunes of the holders of different positions on said securities. Whilst intra-day trading is a commonly used approach to use the swing of the stock market to trade stocks within a day, some traders tend to prefer swing trades.
If you are an active investor in the market, you may come across several terms and concepts as far as investments are concerned. In the share market, too, there are many such terms, and one of them is the pledging of shares. One of the most common questions an investor has is what does pledge mean in the share market?
A company that plans to opt for an OFS must inform the stock exchanges about their plans and process at least two days prior to the issue.
Yes, as per SEBI’s directives, companies must offer at least 10% reservation of an OFS to retail investors. As for PSUs, the reservation may go up to 20%. Another 25% has to be compulsorily reserved for insurance firms and mutual fund companies. Also, the total bid amount an investor can place, whether through multiple bids or otherwise, should not exceed ₹2 lakhs, failing which the bid becomes disqualified.
OFS shares are allocated through a single clearing price and multiple clearing prices. In the former, the investors receive the shares at the same price, while in the latter, the shares are allotted based on price priority.
The process of OFS is quite a new concept as compared to IPOs and FPOs, and was introduced by the Securities and Exchange Board of India quite recently, only in February 2012.
No, an OFS is not the same as an IPO or an FPO as, in an OFS, a promoter’s stake in the company is diluted, and the shares are sold without any new shares being created.
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What is Day Trading Margin?
Day trading, also known as intraday trading, is the process of buying and selling securities in the stock market on the same day through a margin account. The objective of day trading online is to lock in profits from the movement of stock prices.
If there is one thing the stock market does almost like clockwork, it is swing. Not only do the prices of different stocks in the market keep fluctuating, but so do the corresponding fortunes of the holders of different positions on said securities. Whilst intra-day trading is a commonly used approach to use the swing of the stock market to trade stocks within a day, some traders tend to prefer swing trades.
If you are an active investor in the market, you may come across several terms and concepts as far as investments are concerned. In the share market, too, there are many such terms, and one of them is the pledging of shares. One of the most common questions an investor has is what does pledge mean in the share market?
A company that plans to opt for an OFS must inform the stock exchanges about their plans and process at least two days prior to the issue.
Yes, as per SEBI’s directives, companies must offer at least 10% reservation of an OFS to retail investors. As for PSUs, the reservation may go up to 20%. Another 25% has to be compulsorily reserved for insurance firms and mutual fund companies. Also, the total bid amount an investor can place, whether through multiple bids or otherwise, should not exceed ₹2 lakhs, failing which the bid becomes disqualified.
OFS shares are allocated through a single clearing price and multiple clearing prices. In the former, the investors receive the shares at the same price, while in the latter, the shares are allotted based on price priority.
The process of OFS is quite a new concept as compared to IPOs and FPOs, and was introduced by the Securities and Exchange Board of India quite recently, only in February 2012.
No, an OFS is not the same as an IPO or an FPO as, in an OFS, a promoter’s stake in the company is diluted, and the shares are sold without any new shares being created.
Sharekhan Comtrade Private Limited (TM) operates the web site accessible from the URL www.myespresso.com (the “web site”').
Sharekhan Comtrade Private Limited is committed to protecting your privacy and utilising technology that gives you the most powerful, safe, online experience that you can get anywhere else.
Sharekhan Comtrade Private Limited does, however, gather certain information that is provided by you to the Web Site. Sharekhan Comtrade Private Limited believes that by collecting this information Sharekhan Comtrade Private Limited is able to provide you with a personalised web experience, and to assist its own sales team and advertisers in efficiently reaching an appropriate audience.Sharekhan Comtrade Private Limited does, however, gather certain information that is provided by you to the Web Site. Sharekhan Comtrade Private Limited believes that by collecting this information Sharekhan Comtrade Private Limited is able to provide you with a personalised web experience, and to assist its own sales team and advertisers in efficiently reaching an appropriate audience.
Sharekhan Comtrade Private Limited requests the minimum information it believes necessary to achieve this goal.
The following discloses Sharekhan Comtrade Private Limited's information gathering and dissemination practices for the Web Site:
System Data:
Sharekhan Comtrade Private Limited uses your IP address to help diagnose problems with our server and to administer the web site. Your IP address is used to identify you and your shopping cart and to gather broad demographic information.
Registration Data:
The Web Site's registration form may require users to give us contact information (like their name, phone number and e-mail address), unique identifiers (like their PAN Number) and demographic information (like their pin code, age or income level). The Web Site uses customer contact information from the registration form to send the users information about Sharekhan Comtrade Private Limited and promotional material from some of Sharekhan Comtrade Private Limited's partners. The customer's contact information is also used to contact the visitor when necessary. Unique identifiers (such as PAN numbers) are collected to verify the user's identity. Demographic and profile data is also collected at the Web Site. We use this data to tailor the visitor's experience at the Web Site, showing them contents that we think they might be interested in, and displaying the contents according to their preferences. This information is shared with advertisers on an aggregate basis.
Links and Co-Branded Sites:
This site contains links to other Web Sites which are not necessarily been screened or reviewed by www.myespresso.com. Sharekhan Comtrade Private Limited is neither responsible for the privacy practices or the contents of such Web Sites nor shall be held answerable for the inaccurate, inappropriate or offensive data, material, information, products and services that may be viewed on those sites.
Sharekhan Comtrade Private Limited may operate a number of co-branded sites. Policies regarding information collection and sharing may differ on some of these co-branded sites. If you have any particular questions, you should check the privacy statement that appears on each co-branded site.
Order Forms:
The Web Site uses an order form for customers to request information, products and services. The Web Site collects visitors' contact information (like their mobile number or e-mail address), unique identifiers (like their PAN number) financial information (like their account or credit card numbers) and demographic information (like their pin code, age or income level). Contact information from the order form is used to send orders, information about Sharekhan Comtrade Private Limited, and promotional material from some of Sharekhan Comtrade Private Limited's partners to the visitors of the Web Site. The visitor's contact information is also used to get in touch with the visitor when necessary. Financial information that is collected is used to check the users' qualifications and bill the user for products and services. Unique identifiers (such as PAN numbers) are collected from Web Site visitors to verify the user's identity.
Surveys and Contests:
The Web Site's online surveys ask visitors for contact information (like their mobile number or e-mail address) and demographic information (like their pin code, gender, age or income level). The Web Site uses contact data from its surveys to send the user information about Sharekhan Comtrade Private Limited and promotional material from some of Sharekhan Ltd.'s partners. The customer's contact information is also used to contact the visitor when necessary. Users may opt-out of receiving future mailings; see the choice/opt-out section below. Demographic and profile data is also collected at the Web Site. The Web Site use this data to tailor its visitor's experience at the Web Site, showing them content that it thinks they might be interested in, and displaying the content according to their preferences. This information is shared with advertisers on an aggregate basis.
Sharekhan Comtrade Private Ltd run contests on the Web Site in which we ask visitors for contact information (like their e-mail address). Sharekhan Comtrade Private Limited uses contact data from its contests to send users information about Sharekhan Comtrade Private Ltd. and promotional material from some of our partners. The customer's contact information is also used to contact the visitor when necessary. Users may opt-out of receiving future mailings; see the choice/opt-out section below.
Third-Party Advertisement Servers:
Sharekhan Comtrade Private Limited engages the services of an outside advertisement company to display advertisement on the Web Site. These advertisements may contain cookies. While Sharekhan Comtrade Private Limited uses cookies in other parts of the Web Site, cookies received with banner advertisements are collected by the Advertisement company, and Sharekhan Comtrade Private Limited does not have access to this information.
Protection of your Data and Information:
The privacy and protection of your data and information provided to us is of vital importance. Sharekhan Comtrade Private Limited shall ensure to safeguard the security and confidentiality of any information you share with us. Any personally identifiable information of the customers obtained by us shall not be used or shared other than for the purposes to which the customers consents. However security and confidentiality of information cannot be guaranteed cent percent. Hence despite our utmost efforts to protect your personal information, Sharekhan Comtrade Private Limited and www.myespresso.com cannot warrant the security of any information you transmit to us through our online services. Such transmission of your personal information is done at your own risk.
Disclosure of Customer Information :
Sharekhan Comtrade Private Limited and www.myespresso.com shall not deliberately disclose customer's personally identifiable information to any unauthorized third person, save and except where such information shall be disclosed in good faith and for the purpose of law for the time being in force or to protect the rights and property of Sharekhan Comtrade Private Limited and www.myespresso.com.
Public Forums :
The Web Sites makes chat rooms, forums, message boards and/or news groups available to its users. Please remember that any information that is disclosed in these areas becomes public information and you should exercise caution when deciding to disclose your personal information.
Supplemental Information :
The Web Site supplements the information that you provide with information that is received from third parties.
The Web Site DOES NOT entice by the prospect of a special game, prize or other activity, to divulge more information than is needed to participate in the activity.
Further to the above, in light of the recently notified Information Technology (Reasonable security practices and procedures and sensitive personal data or information) Rules, 2011. (Hereinafter referred to as the Rules)
The following shall be deemed to be sensitive information :
Password;
Financial information such as Bank account or credit card or debit card or other payment instrument details;
Physical, physiological and mental health condition;
Sexual orientation;
Medical records and history;
Biometric information;
Any detail relating to the above clauses as provided to body corporate for providing service; and
Any of the information received under above clauses by body corporate for processing, stored or processed under lawful contract or otherwise:
provided that, any information that is freely available or accessible in public domain or furnished under the Right to Information Act, 2005 or any other law for the time being in force shall not be regarded as sensitive personal data or information for the purposes of Rules.
Collection of Information:
Compliance with KYC guidelines as per SEBI / Exchanges / Or any other Act, law or regulation requiring the same and any internal KYC guidelines formulated by Sharekhan Comtrade Private Limited.
In order to provide enhanced trading experience to the client.
In order to provide any further information to be provided to regulators.
Such information may be collected in a manner that the client is always aware of the collection and purported usage of the same. The client shall have an option to withdraw consent to share the information. However such intimation shall be required in writing. Such intimation shall only be taken into account from the date on which the same is received. Sharekhan Comtrade Private Limited may choose to stop services to such a client in case such intimation is received. Such information shall only be used for the purpose it is collected.
Clients would be allowed an option not to disclose any information to be collected, provided the same is in compliance with regulatory requirements.
Disclosure of information:
Disclosure of sensitive information would be as per the terms agreed by the clients. For any change in such terms, the clients would be informed.
Provided no consent may be required in case the same is being shared as per compliance guidelines or as required by regulators.
Any information being disclosed to third parties would be in accordance with the Rules and would be done provided such third party has the same level of compliance guidelines as Sharekhan Comtrade Private Limited.
Sharekhan Comtrade Private Limited shall allow clients to review their personal information and the same shall be allowed to be edited provided exchange guidelines relevant to the same are followed.
Sharekhan Comtrade Private Limited shall maintain reasonable security practices and procedures and maintain a comprehensive documented information security programme. In the event of an information security breach, Sharekhan Comtrade Private Limited or a person on its behalf shall be required to demonstrate as and when called upon to do so by the agency mandated under the law, that there have implemented security control measures as per their documented information security programme and information security policies and information security policies that contain managerial, technical, operational and physical security control measures that are commensurate with the information assets being protected with the nature of business.
KYC Languages
Download Client Registration Documents (Rights & Obligations, Risk Disclosure Document, Do's & Don't's) in Vernacular Language :
Note: "This document is a translated version of the client registration documents in English and is being provided in vernacular language to facilitate better understanding by the investors. In case of any ambiguity, the contents of the English version would prevail."
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