There is a big news related to the privatisation of public sector banks. As per media reports, the government is planning to reduce its stake in three PSU banks soon. This stake sale will be done through an Offer for Sale (OFS). As per sources, the Government of India may reduce its stake in Punjab & Sind Bank, UCO Bank, and Central Bank of India.
According to sources, the Government is planning to reduce its stake first in Punjab & Sind Bank. The government’s stake in this bank currently stands at approximately 98.25%, which is significantly higher than the minimum public shareholding norm. After that stake will be reduced in UCO Bank and Central Bank of India. Recently, the Central Government has divested up to 2% stake in Indian Overseas Bank (IOB) through an offer for sale (OFS). After that, the Government announced to Sell more Stake in Indian Overseas Bank.
Now, let’s understand what is OFS?
An Offer for Sale (OFS) is a method used in the Indian stock market where promoters, government, or large shareholders sell their shares of a listed company to the public through the stock exchange platform. It is mainly used when big shareholders want to reduce their stake in a company in a transparent and regulated manner. An OFS (Offer for Sale) is different from both IPO and FPO. In an OFS, no new shares are created. Instead, promoters or large shareholders sell their existing shares directly through the stock exchange platform.
