Sebi rules out relaxing public shareholding norms

In a bad news for promoters holding on to their 80 to 90 per cent stake in listed companies and lobbying to retain it, the Securities and Exchange Board of India (Sebi) has said that it will not relax its guideline that makes it mandatory for all listed firms to have, at least, 25 per cent shareholding by the public.

Sebi chairman U.K. Sinha said on Friday that all listed companies from both public and private sectors will have to raise public shareholding to a minimum of 10 per cent and 25 per cent, respectively, within the stipulated timeframe and there will be no relaxation.

"Companies (in the private sector) will have to see that public shareholding is 25 per cent within the timeframe. As far as privatelisted companies are concerned, it is June 2013 and for the public sector firms it is August 2013," Sinha said on the sidelines of a Bombay Stock Exchange function here.

"Some firms feel Sebi will relax this. But let me tell you, I am going to make it difficult. There are 181 non-PSU firms which had not met the minimum shareholding norms as on February." Sinha said about Rs 27,000 crore will have to be mobilised by June 2013 by private sector firms and 16 PSUs will mobilise Rs 12,000 crore.

Some promoters of large real estate companies and the promoter of a large private airline have more than 80 per cent stake in their companies and they will be affected by Sebi guidelines.

On the revamping of initial public offering (IPO) process, Sinha said Sebi will come out with guidelines on MIMPS (Manner of Increasing and Maintaining Public Shareholding in Recognised Stock Exchanges) in the next two months, he added.

Courtesy: Mail Today