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PSBs may re-approach Sebi for relaxing the rule on promoter equity

Last year, they got a year's extension to meet the norm, till August 2018

Namrata Acharya  |  Kolkata 

Sebi. (Photo: Kamlesh Pednekar)
Sebi. (Photo: Kamlesh Pednekar)

A majority of (PSBs) with high government shareholding might have to soon re-approach the Securities and Exchange Board of India (Sebi) for relaxing the rule on promoter equity. They had got one such waiver.

To bring this down as required, they could go for (QIP) or Employee (Esops). However, in with particularly high government holding, even after exercising these two measures, the promoter holding might still be higher than the stipulated level.

were required to bring down government shareholding to at least 75 per cent, to comply with the amended by August 2017. Last year, they got a year’s extension to meet the norm, till August 2018. However, with the recent capital infusion, government shareholding has gone up; also, with the adverse market situation, they are unable to tap the capital markets for reducing state equity.

As on end-March, 13 had a government shareholding above 75 per cent. Kolkata-based United Bank of India (UBI) had the highest at 93.13 per cent. It has board approval for both and

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“We expect the government will give additional time to for meeting the norm. We are also awaiting increase in authorised capital before going for Esop issuance,” said Pawan Bajaj, managing director of UBI. He says its will reduce the government stake by around three percentage points.

has asked the Securities and Exchange Board of India (Sebi) for additional time to reduce government equity, now at 84.23 per cent. “In addition, we already have board approval for but due to the adverse market situation, we feel this is not the right time for one,” R K Takkar, managing director, told Business Standard.

Earlier, become one of the first among to issue an Esop but this did not garner much interest among employees.

Others with high government shareholding are Indian Bank (81.87 per cent), Indian Overseas Bank (89.74 per cent), Dena Bank (80.74 per cent), Bank of Maharashtra (87.01 per cent), Central Bank of India (86.40 per cent), Corporation Bank (79.87 per cent), IDBI Bank (80.96 per cent), Oriental Bank of Commerce (77.23 per cent), Bank of India (83.09 per cent) and Andhra Bank (77.99 per cent).

First Published: Mon, May 14 2018. 02:06 IST
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