Offers for sale dominate IPOs so far in 2018

An OFS is a route for existing shareholders to sell their holdings in companies. The money from the sale goes to the selling investor.

These existing shareholders include – promoters, early investors, private equity investors and even employees in some cases, who want to offload their shares allotted as employee stock options (ESOP).

 

These 11 IPOs include both private sector companies as well as public sector companies, where the government of India divested part of their stake.

For instance, ICICI Securities, which raised over Rs 4,000 crore in March through the public offer, where the promoter of the company, ICICI Bank, offloaded its stake and no fresh capital went to the company.

Similarly, in the case of TCNS Clothing, owner of brands like ‘W’, ‘Aurelia’ and ‘Wishful’, four promoters and an early investor – Wagner, offloaded some of their shares, while in case of the auto component manufacturer, Varroc Engineering, Tata Capital offloaded its stake.

Bharat Dynamics, Hindustan Aeronautical, RITES and Mishra Dhatu Nigam are among the public sector units (PSUs) where the government of India diluted its stake through the public offer with no fresh capital coming into the company.

Also, there were few IPOs including Newgen Software, Amber Enterprise, CreditAccess Grameen among others with the mix of offer-for-sale as well as fresh issues.

These companies gave exits to some of the existing shareholders and also raised fresh capital for the company’s future growth and expansion.