What I have seen there are a couple of differences between OFS of pvt companies and OFS of PSU’s.
In pvt companies most of the time OFS is carried out all of a sudden and the investors are taken on a surprise and the shares takes a hit where as the for PSU OFS/ stake sale , some hints are given well in advance which is healthy since existing share holders are are aware of the impending OFS, so they would not get surprised if the share slips a bit and the investors are also ready with cash to add in to such dips if the stock is fundamentally sound.
The second difference is normally , PSU’s offer the OFS prices only @ 8-10% discount to market price where as pvt companies at times can give a huge discount to market price in order to onboard reputed investors. There may be other reasons too in offering huge discount to the market price in case of Pvt company OFS.
Another difference I have seen is post OFS, the share recovers very fast , where as in case of PVT company shares, it takes time to recover due to same huge discount to market price.
Having said that it does not matter much to long term investors if the selected stock is Fundamentally sound and available at a good valuation. I buy or add in every dip in such a stock whenever I have money without bothering or worrying much about OFS.
The Govt is the promoter and as per SEBI guidelines, the Govt need to ensure that they should ensure their stake to max 74% in any PSU to ensure enough liquidity. It is also good for the minority share holders as the investor base widens with institution / MF participation.
During Modi 3, the Govt seems to have decided few things :
(1) There would not be any divestment target set during Budget…If they set a target , they have to achieve at any cost or else they have to face criticism for not achieving it.
If they achieve it , they may have to sell stake at any cost under any market conditions
(2) They would henceforth call it as Capital receipt. They would sell stake as and when market conditions are good and PSU financial performance is good.
So the basic target is to enhance financial performance of the PSU consistently which would result in to getting more dividends and share price appreciation and then they may like to sell small stakes.
(3) However , the Govt has made it clear that there would not be any strategic sale in some 6 sectors (major stake sale which could lead to Govt becoming a minority shareholders - less than 50%).
These critical sectors where our Govt would like to have full control with major stake are Defence , Atomic , Energy (oil & gas, coal, power ) , Rail transport , Finance,.