An OFS (Offer For Sale) is the portion of an IPO in which existing shareholders — promoters, early investors, sometimes employees — sell their shares to the public. The money raised goes to the selling shareholders, not into the company. This contrasts with a "fresh issue", where the company creates new shares and keeps the proceeds.
Why it matters to you
The OFS portion tells you who is cashing out at the IPO. A large OFS by long-term insiders can be a red or yellow flag — why are they selling so much now? — while a modest OFS alongside a meaningful fresh issue is more reassuring. The DRHP and RHP break down the fresh issue versus OFS split.
Example: An IPO that was almost entirely OFS meant the company raised no new growth capital — purely an exit for early backers.