Datanomics: One in four listed CPSEs falls short of Sebi's MPS norm

Of 79 listed CPSUs and financial institutions, 21 have not met SEBI's public shareholding requirement, with nearly half of them from the financial sector

Listed firms in India are required to comply with the Securities and Exchange Board of India’s (Sebi’s) Minimum Public Shareholding (MPS) norm, which mandates that at least 25 per cent of their equity shares be held by the public or non-promoters. The companies have to do so within three to five years of their listing, depending on their market capitalisation. 

 

However, central public sector units (CPSUs) and financial institutions have been given a relaxed timeline to do so. They are now required to adhere to the minimum public holding norm by 1 August 2026. The Life Insurance Corporation (LIC), which was listed on 4 May 2022, has been given time till 16 May 2027 to divest 10 per cent of its holding.

 

Data reveal that out of 79 listed CPSUs and public sector financial institutions in India, 21 companies are currently below the 25 per cent public shareholding threshold, and almost half of the latter belong to the financial sector.

 

 

The data show that these 21 companies span ten different sectors — ten from the financial sector, two from fertilisers, two from trading, and the remaining seven from other sectors.

  

Among the CPSUs and public sector financial institutions with the lowest levels of public shareholding are Kudremukh Iron Ore Company (0.97 per cent), LIC (3.5), and IDBI Bank (5.29). The government plans to divest the rest of the shares — 6.5 per cent — in LIC in phases over the next two years.