Offer for sale (OFS) is a method used to reduce & reverse the concentration of stock ownership, making it more scattered and dispersed in the hands of many shareholders. It is a mechanism to transfer and distribute ownership of a company from the promoters/institutions to other investors in the stock market.

Which investor categories are eligible to participate in an OFS?

Investors can participate in the OFS under the following categories:

• Retail Investors (maximum bid of 2 lakh).
• HNI/Non-Retail Investors (minimum bid of 2 lakh).

What is the cut-off time for applying to an OFS (Offer for Sale) on ProStocks?

The cut-off time to place on OFS order on ProStocks is 2.30 PM this cut-off time will be same for both Retail and HNI categories investors. Order received after 2.30 will be placed on best effort basis.

Can I apply in both the Retail and HNI categories under one PAN?

No. You must choose either the Retail category (up to 2 Lakh) or the HNI (Non-Retail) category (above 2 lakh) for a single OFS under one PAN.

What is the Cut-Off Price in OFS?

Cut-Off price is the lowest price at which an investor is allocated shares during an OFS.This way, the investor can simply apply for shares at the cut-off price without worrying about price discovery at the time of bidding.

What is Floor price in OFS?

Floor price is the minimum price at which seller wants to sell his shares. However, this information is not declared to the market & is informed to the designated exchange oneday prior to the day of OFS after the closure of the trading hours.

Why separate allocation?

• SEBI’s OFS framework (Circular SEBI/HO/MRD/MRD PoD 3/P/CIR/2023/10, Clause 6.2) requires that collateral for OFS be segregated from CM segment funds.
• Clearing corporations (NCL/BSE Clearing) enforce this rule strictly; CM balances cannot be automatically mapped to OFS.

How brokers allocate collateral

• NCL has not provided client wise APIs for OFS collateral allocation.
• Brokers must pool all client funds together and deposit a single consolidated amount in the OFS bucket.
• This is a manual process across the industry; no broker can automate client wise transfers in real time.

Order acceptance process

• Every OFS order is routed to the clearing corporation for validation.
• Unlike CM orders (instant validation), OFS orders take a few seconds to be accepted or rejected by NCL’s RMS.
• The trading platform displays the final status once CC responds.

Client responsibilities

• After placing an OFS order, clients must check order status (accepted/rejected).
• If rejected, clients should immediately call the dealing desk to request collateral reallocation from CM to OFS.
• Advance intimation helps brokers earmark sufficient collateral in OFS and avoid last minute rejections.

Broker’s effort

• Brokers often allocate their own funds into the OFS bucket on an estimation basis.
• Sudden surges in bids (e.g., between 2.30 PM–3:30 PM) can exceed pooled collateral, leading to rejections.
• This is an industry wide limitation, not unique to any single broker.