Sebi withdraws minimum shareholding rule for non-promoters in OFS

Sep 30, 2022

Synopsis

Further, the regulator allowed retail investors to bid for the unsubscribed portion of the institutional segment in the offer for sale, it said in a release

The Securities and Exchange Board of India today eased rules for offer for sale of shares by non-promoters of companies by doing away with the requirement of minimum stakeholding.

Currently, non-promoter shareholders that hold at least a 10% stake in a company are permitted to sell shares through the offer-for-sale route.

Further, the regulator allowed retail investors to bid for the unsubscribed portion of the institutional segment in the offer for sale, it said in a release.

Sebi has also extended the OFS mechanism to unit holders of real estate and infrastructure investment trusts.
“These changes are aimed at bringing in more flexibility and efficiency to the OFS framework,” Sebi said.

This is part of a series of other decisions taken by the regulator at its board meet today.

With an aim to expedite payout of redemption and dividends to mutual fund unit holders, Sebi has reduced the timeline for the same. The timeline for redemption payout has been reduced to 3 working days from the existing 10 working days, and for dividends to 7 working days from 15 days.

The other broad decisions are as follows:
- Minimum holding requirement of units for sponsors of Real Estate Investment Trusts (REIT) reduced to 15 per cent from 25 per cent
- Discontinuation of a separate regulatory framework for unlisted Infrastructure Investment Trust (InvIT)

[The Economic Times]