Outcome of 35% minimum public shareholding

Such an enforced dilution will offer chances to buy into certain closely-held shares

The implications of the Finance Minister’s “thought experiment” – every listed entity should have a minimum 35 per cent public shareholding – are worth considering in detail. Most Public Sector Units (PSUs) don’t meet that criteria and a counting-on-fingers assessment suggests that one out of every three or four listed companies doesn’t meet that criterion.

Assuming Securities and Exchange Board of India (Sebi) goes along – and don’t forget that Sebi is, technically, an independent regulator – there would be an enormous sequence of follow-on-public offers (FPOs). Say, conservatively, somewhere between 5-10 per cent of listed shares would have to be