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What is Offer for Sale (OFS)?


An Offer for Sale (OFS) is a form of share sale where the shares offered in an IPO or FPO are not fresh shares issued by the company, but an offer by existing shareholders to sell shares that have already been allotted to them. An OFS does not result in increase in the share capital of the company since there is no fresh issuance of shares. The proceeds from the offer goes to the offerors, who may be a promoter(s) or other large investor(s). 

The disinvestment program of the government of India, where the government offers shares held by it in Public Sector Undertakings(PSUs), is an example of OFS. It may be stated that OFS is a secondary market transaction done through the primary market route.

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