Analysis and Insights into the world of IPOs and investing in India

Saturday, December 10, 2016

How to buy shares in an OFS

Investors can buy shares in OFS through existing Trading Members of NSE. They will have to provide bids to the Trading Member specifying the quantity and the price at which they are willing to bid for a given issue. Trading members essentially means the brokerage house with whom investor has demat and trading account

To buy shares offered under an OFS, investors can login to their online accounts with brokerage houses (in case their account is online) or get in touch with the brokerage firm to place their orders (if the account is not online)

There is a Floor price or a base price defined for the OFS. Investors can place price bids at any price greater than or equal to the floor price announced. In addition to price bids, "Sellers" may provide retail investors option to bid at "cut-off", where the allocation to retail investors shall be made based on the cut-off price determined in the non-retail category. The cut-off mechanism is similar in OFS as it is in case of an IPO. There is no minimum bidding quantity in case of an OFS unlike an IPO. Investors can place bid even for 1 equity share.

As far as OFS allotment status is concerned, the stock exchanges share allotment report with Trading Members (i.e. Brokerage firms) at the end of the day i.e. after 6:00 P.M. on the day of OFS. Investors can get the information from their trading members on the same day
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