thanks for the very informative video…Can you please clear couple of points. 1. Why do we have different prices for different set of investors (Floor and Cut off). 2. Doesn’t retail are at disadvantage when they have to higher as compared to Non retail. 3 How does company decide on exact Floor and Cutoff price.?
The HNIs & Institutions are the price discoverers in an OFS. The seller decides what is the minimum price they want to sell the shares at – floor. But the selling price finally depends on the demand from the large investors. Since a portion of the OFS is given to retail shareholders also, they simply become takers of the price realized by the large buyers demand.
In a multiple price issue, retail shareholders may feel they are disadvantaged since the price increases for them. However, from the perspective of the seller, it seems fair to first sell the biggest part of the OFS, figure the price and then finally open it up to retail.
Thik
thanks for the very informative video…Can you please clear couple of points. 1. Why do we have different prices for different set of investors (Floor and Cut off). 2. Doesn’t retail are at disadvantage when they have to higher as compared to Non retail. 3 How does company decide on exact Floor and Cutoff price.?
Many thanks.
The HNIs & Institutions are the price discoverers in an OFS. The seller decides what is the minimum price they want to sell the shares at – floor. But the selling price finally depends on the demand from the large investors. Since a portion of the OFS is given to retail shareholders also, they simply become takers of the price realized by the large buyers demand.
In a multiple price issue, retail shareholders may feel they are disadvantaged since the price increases for them. However, from the perspective of the seller, it seems fair to first sell the biggest part of the OFS, figure the price and then finally open it up to retail.
How can I apply for OFS of IRCON through Zerodha?
Here you go – https://support.zerodha.com/category/trading-and-markets/corporate-actions/articles/how-do-i-apply-for-ofs