Aditya Birla Sun Life Asset Management Company's OFS opens, founders will sell 11.47% stake

Aditya Birla Capital is in the headlines. The company is selling 11.47% stake in its subsidiary Aditya Birla Sun Life AMC through Offer for Sale i.e. OFS.

The founders will sell 7% stake through OFS. If the response from investors is good, the founders can also sell an additional 4.47% stake in the greenshoe option. That means the promoters will sell a total of 11.47% stake in Aditya Birla Sun Life AMC. Aditya Birla Capital and Britain's Sun Life are the promoters of Aditya Birla Sun Life AMC. The OFS of the company will be open on 19th and 20th March. Birla Sun Life AMC has fixed the floor price of Rs 450/share for this.

Common investors can also participate in this OFS. It will open for institutional investors on March 19 and for public i.e. general retail investors on March 20.

Promoters will sell shares of Aditya Birla Capital and Sun Life Company

*Will sell 7% stake through OFS

*Can also sell additional 4.47% stake in Greenshoe option

*Will sell a total of 11.47% stake

*Floor price fixed at Rs 450/share

*Will sell shares for 25% minimum public shareholding

*OFS will open on 19th and 20th March

*Why do you have to sell your stake?

According to the rule of minimum public shareholding, public holding in a listed company should be at least 25%. Promoters can have a maximum shareholding of only 75%. Whereas 86.47% shares of Aditya Birla Sun Life are held by the promoters. In this way the promoters have to reduce their share holding.

Due to reduction in public shareholding the liquidity of shares reduces. Its price manipulation may get a boost. Due to reduced liquidity, artificial hype of demand starts getting created, due to which a bubble starts getting created in the price of shares. Therefore, market regulator SEBI has made a rule to keep the minimum public shareholding at 25%.