Section 28 of the Companies Act, 2013
Section 28 of the Companies Act, 2013 deals with Public offer of securities to be made by a company already listed.
Here’s a summary of the section:
📘 Section 28 – Public Offer of Securities to be Made by a Company
1. Existing Companies Already Listed:
This section applies to a company that has already issued securities to the public and is listed on a stock exchange.
Such a company may make a further public offer by way of:
Issue of a prospectus, or
Offer for sale (OFS) of securities.
2. Offer for Sale by Existing Shareholders:
A public offer may be made by:
An existing shareholder, or
Any member of the company holding shares, or
By the promoters.
This can include disinvestment by the government in case of public sector undertakings (PSUs).
3. Requirements and Conditions:
The Central Government may prescribe the conditions under which such an offer can be made.
All such offers must comply with the SEBI (Securities and Exchange Board of India) Regulations.
4. Application of Provisions:
In the case of an offer for sale, provisions related to issuance of prospectus and public offering under this Act will apply as if the shares were being issued by the company itself, even though it is a sale by shareholders.
📝 Example:
If a government company is going for disinvestment, and the government is selling part of its stake to the public, Section 28 applies. The offer must comply with SEBI guidelines, and a prospectus is still required, though the company is not issuing new shares—it is just a sale by existing shareholders.
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