The Securities and Exchange Board of India (Sebi) said it was still discussing a proposal on making it mandatory for all listed companies to have at least 25 per cent of their share holding with public investors.
“We are deliberating on it,” Sebi Chairman CB Bhave said. In his Budget speech Finance Minister Pranab Mukherjee had said that equity holding of non-promoter or public shareholders in all listed companies in both public and private sector should be raised.
Bhave along with other members of the Sebi board had a meeting with the finance minister today. Currently, there are a number of public sector companies with public holding below 25 per cent. “I think PSU listing is a good thing because it does impose its own discipline,” added Bhave.
PSUs will also be required to come out with quarterly reports as part of the listing requirement. After the meeting, the finance minister told reporters, “The basic objective of Sebi is to protect investors during a financial crisis and handle the situation accordingly. We internally discussed some of the problems Sebi has and we will address them and take appropriate steps.”
The finance ministry favours increasing non-promoter shareholding in a phased manner as the market may not be able to absorb sudden surge in share sales by listed firms.
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