Indigo to cut promoter share soon

Promoter shareholding in InterGlobe Aviation is 85.9%; needs to be brought down to 75%

InterGlobe Aviation would soon mull ways to meet the 25% minimum public shareholding (MPS) norms. The promoter shareholding in the company that operates IndiGo Airlines is 85.9% and needs to be brought down to 75% before November 2018 to become MPS-compliant. Currently, there are more than 30 private sector firms in the listed space (trading is suspended in some of them) where promoter shareholding needs to be pared. The top 10, most of them newly listed, have to dilute shares worth nearly Rs 19,000 crore (see table). The deadline for private companies ended in June 2013. However, new companies entering the market by way of IPOs are allowed to have a promoter stake of more than 75% if their post-issue market capitalisation is more than Rs 4,000 crore. Such companies are given 3 years’ time to meet the MPS norms. To meet the norms, firms can only reduce promoter stake by methods stipulated by Sebi. Some of these include offer for sale, institutional placement programme and issue of bonus shares to non-promoter shareholders.