The Securities and Exchange Board of India (Sebi) is looking at providing companies with more options to meet the mandatory 25 per cent public shareholding criterion, besides the offer for sale (OFS) and institutional placement programme (IPP) routes allowed recently.
Sebi Chairman U K Sinha on Saturday said the market regulator had received representations seeking more avenues so that compliance could be ascertained. “I would like to assure all the suggestions are under active considerations. We are examining those with an open mind,” Sinha said. He, however, hinted that any extension in the next year’s deadline for meeting the criterion, for both private and public companies, was not on the cards.
He reiterated that sufficient time had been given to all listed companies to fulfil the minimum public shareholding norms. “It is a wrong assumption that the timeframe was just three years. The rules have been there since 2001…,” he said at the conference, ‘Minimum Public Sharehold-ing: Issues & Challenges’, organised by the PHD Chamber of Commerce and Industry.
He pointed out that minimum public shareholding in 30 of the listed companies was less than 10 per cent, while it was in the range of 10-20 per cent in 95.
The total amount to be raised by companies to meet the requirement is estimated at around Rs 32,000 crore — about Rs 11,000 crore for public sector companies and Rs 22,000 crore for the private ones.
According to the listing guidelines, government companies need to have a minimum public shareholding of 10 per cent and private sector companies at least 25 per cent. Private companies have to meet the criterion by June 2013, while the deadline for PSUs is August 2013.
Justifying the deadline, Sinha said: “If we say market is not good at present, (the question is) was it not good in 2006-07 as well? The rules were there since 2001… and definitely there in 2006.”
About the recent crash of mid-cap stocks, Sinha said detailed investigations would be completed soon and action would be taken against those found guilty of stock manipulation.