The Government will determine the retail reservation portion on a “case-to-case” basis in all the divestments it proposes to undertake this fiscal through the offer-for-sale (OFS) route.
The OFS (auction model) through stock exchanges will be the main mechanism through which most of the divestments will happen this fiscal, a senior Government official said.
The portion reserved for retail investors in OFS would be more than 10 per cent of the issue size and even go up to 20 per cent in some cases, the official added.
SAIL will most likely be the first off the block (in the next few weeks).
A similar approach (case-to-case basis) will be adopted for determining the discounts to be provided to retail investors.
The Finance Ministry is reaching out to retail investors so that more of them could participate in the divestment process.
The market regulator SEBI had on August 8 modified the OFS guidelines to create a 10 per cent reservation for retail investors, among other measures.
The issuer can reserve a higher portion at their discretion.
“Where the total issue size is very large, the portion of retail reservation cannot be as high as 20 per cent,” the official sources said.
Although the OFS through stock exchanges mechanism has been in vogue since 2012, it had not been a big hit among retail investors.
Part of the reasons could be the absence of any reservation or discount for retail investors.