What is Offer for Sale Method?

OFFER FOR SALE : A company sells the securities through the intermediaries such
as issue houses, and stock brokers. This is known as an offer for sale method.
Initially, the company makes an offer for sale of its securities to the intermediaries
stating the price and other terms and conditions. The intermediaries can make
negotiations with the company and finally accept the offer and buy the shares from
the company. Then these securities or shares are re-sold to the general investors in
the stock market normally at a higher price in order to get profit. The intermediaries
have to bear the expenses of this issue. The object of this issue is to save the time,
cost and get rid of complicated procedure involved in the marketing of securities. The
issues can also be underwritten in order to ensure full subscription of the issue. The
general public get the shares at a higher price. The middlemen are more benefited in
this process.