The cut-off price for retail OFS orders can be higher because it depends on the institutional demand received on the first day of bidding.
How the OFS bidding process determines the cut-off price
During an Offer for Sale (OFS) issue, orders are collected over two days:
- Day 1: Institutional and HNI orders (bids above ₹2 lakhs) are accepted. Based on these bids, a cut-off price is determined for the second day.
- Day 2: All retail bids are taken. The cut-off price from Day 1 becomes the floor price for your retail bids.
When the cut-off price varies
- Low institutional demand: The cut-off price for your retail bids may be the same as the institutional bids.
- Strong institutional demand: The cut-off price for your retail bids may be significantly higher.
Bids from individuals and HUFs (Hindu Undivided Families) worth less than ₹2 lakhs are considered retail bids.