FLOOR PRICE: - - Floor prices is the price provided by the selling company as a minimum price at which an investor can place their order in an OFS.
- On day 1 of an OFS, all the non-retail investors have to apply at a price equal to or greater than floor price.
- No allocation to institutional investors will be made if the bid price is below the floor price on T Day.
CUT-OFF PRICE: - - A cut off price is determined for the 2nd day on the basis of the bids received on the 1st day and this becomes the floor price or minimum bid price for retail bids.
- If there is strong institutional demand then the cut off price for retail bids may be significantly higher than floor price for non-retail bids and
- If there is low demand then the cut off price for the retail bids may be same or low than the floor price of day 1.
- No allocation to retail investors will be made if the bid price is less than the cut off price on T + 1 day.
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