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Thursday, May 30, 2013

The Ministry of Finance had issued guidelines for minimum public shareholding for all listed companies - 25% for private companies and 10% for public companies. For private sector, the deadline to meet these is June 3, 2013 and this is only a few days away. For public companies, the same is August 8, 2013. As reported by the Economic Times, these offers for sale (OFS) are believed to be worth about Rs 135 bn. Of this, more than 70% will be done by private players. While the daily also reported that the flood of OFS' could dampen the on going market rally - on account of market liquidity going towards subscribing to these - it should naturally not be a cause of concern for a long term investor such as yourself. In order to make their respective OFS' comfortably subscribed, promoters would be pricing them lower to the market prices. As such, one could use these opportunities to buy into good companies. All this, provided that valuations are not out of your comfort zone!

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