Sebi allows company owners to auction stakes on bourses

Market regulator the Securities & Exchange Board of India (Sebi) said on Tuesday it would allow owners of the top-100 companies by market value to raise funds by auctioning their stakes through stock exchanges.

The offer has to be for at least 1% of the company's paid-up capital which should be worth a minimum of Rs 25 crore, the Sebi said.

Company owners can sell shares through stock exchange deals but they will not be allowed to bid for the shares themselves, it said in a statement on its website.

The move will help fund-raising by the government, which has so far been unable to meet its target of Rs 40,000 crore from share sales in state-run firms this fiscal that ends in March.

A poor stock market that posted its first annual fall in three years in 2011, combined with risk aversion among investors prompted the government to delay share sale plans of several of its companies, including Oil & Natural Gas Corporation and Steel Authority of India.