Offer for sale

An offer for sale is the part of an initial public offering in which existing shareholders, usually the promoters or investors, sell shares they already hold. The proceeds go to the selling shareholders, not to the company, which receives money only from the fresh issue.

For an SME issue, regulation 230 of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018, as amended with effect from 4 March 2025, caps the offer for sale at twenty per cent of the total issue size and bars a selling shareholder from selling more than fifty per cent of its holding. At most issue sizes the twenty per cent cap binds first. The fifty per cent cap is not stated to be computed on a fully diluted basis, which matters where options or convertibles are outstanding. The position is stated as at 21 September 2026.