Govt Notifies 25 percent Minimum Public Holding Norms For Listed PSUs

By siliconindia | Thursday, 09 October 2014, 10:41 Hrs

The new notification would bring in uniformity among all listed entities, irrespective of their promoter being the government or private sector entities, when it comes to minimum threshold limit for non-promoter or public holding.

As per the current valuations, the dilution in promoter holding in over 30 listed PSUs would lead to the government garnering over 60,000 crore through sale of shares.

However, this figure might change as these share sales would take place over a long period of nearly three years.

The major PSUs where public shareholding is below 25 per cent include Coal India, SAIL, MMTC, NHPC, NMDC and SJVN.

While private sector firms were given three years time in June 2010 to achieve minimum 25 per cent public holding, the PSUs were also given three years in August that year to increase their public shareholding to at least 10 per cent.

The earlier proposal in June 2010 also required PSUs to attain minimum 25 per cent public holding, but these norms were relaxed later at that time.

However, a fresh proposal was mooted earlier this year and subsequently SEBI’s board approved in June a proposal to require PSUs to have minimum 25 per cent public holding.

In case of 105 companies that were found non-compliant to minimum public holding norms, SEBI last year issued directions, including freezing of voting rights and corporate benefits such as dividend, issuance of rights and bonus shares, among others, with respect to excess of proportionate promoter shareholding in respective companies.

Source: PTI