Govt Notifies 25 percent Minimum Public Holding Norms For Listed PSUs

NEW DELHI: Paving way for sale of PSU shares worth an estimated 60,000 crore over three years, the government has notified rules for minimum 25 per cent public shareholding in listed state-owned firms.

To comply with these norms, over 30 listed PSUs will need to raise their public shareholding to minimum 25 per cent by August 21, 2017, as per a notification for amendment to the Securities Contracts (Regulation) Rules.

The move would help in promoting wider investor base in listed state-run companies and also provide a boost to the government’s plan to raise funds from disinvestment programme.

Previously, the listed PSUs were required to have at least 10 per cent public holding, whereas the minimum public holding in non-PSU listed companies is already 25 per cent.

The non-PSUs were asked in June 2010 to attain minimum 25 per cent public shareholding within three years. Following the expiry of this deadline in June 2013, 105 listed companies were found to be non-compliant with these norms and necessary actions were initiated against them by regulator SEBI.

”... every listed public sector company which has public shareholding below twenty five per cent... shall increase its public shareholding to at least 25 per cent, within a period of three years, in the manner, as may be specified, by the Securities and Exchange Board of India,” the Finance Ministry has said in its new notification for PSUs.

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