SEBI has modified the guidelines pertaining to OFS of shares through stock exchange mechanism by way of its circular dated June 27, 2017. The rationale for such revisions was to encourage greater participation by employees. The key modifications are as follows:

i. Promoters of eligible companies are permitted to sell the shares within 2 weeks from the OFS transaction to the employees, and such an offer would be considered to be a part of the OFS transaction.

ii. Promoters have the discretion to offer the shares at the price discovered in the OFS transaction, or at a price which is at a discount to such discovered price.

Promoters are required to make necessary disclosures in the OFS notice disseminated to the stock exchanges, and such disclosure would be required to contain details of the number of shares offered to employees and the discount offered, if any.