Framework for offer for sale of shares to employees
SEBI, vide circular dated January 5, 2024, introduced a framework to provide an option for promoters to offer shares to employees in offer for sale ("OFS") through the stock exchange mechanism, with effect from February 22, 2024. It is an additional option to the existing procedure of OFS to employees outside the exchange mechanism. The procedure for offering shares through stock exchanges is detailed in the circular. The maximum bid amount will be INR 5,00,000 (Indian Rupees five lakh) and each employee will be eligible for an allotment of equity shares up to INR 2,00,000 (Indian Rupees two lakh).
Amendments to the bidding process for employees participating in OFS
SEBI, vide circular dated June 14, 2024, issued modifications in the framework for OFS of shares to employees. The SEBI circular dated January 23, 2024, issued the framework for offering of shares to the employees in an OFS through stock exchanges. This framework is modified to the effect that employees must place bids on T+1 day at cut-off price of T Day (earlier, the bids were placed at the cut-off price of T+1 day). The provisions of the circular will come into force from July 14, 2024.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
