Listing PSUs will make them more accountable: Bhave
Says it will bring them under scrutiny
Market regulator Sebi on Friday said listing of state-owned entities would make them disciplined and bring them under investors’ and regulator’s scrutiny, while welcoming the government’s ambitious disinvestment programme.
“I think PSUs coming into listing is a good thing because listing does impose its own discipline”, Sebi Chairman C B Bhave told PTI when asked about the announcement by Finance Minister Pranab Mukherjee that government would divest stake in these undertakings but retain at least 51 per cent stake.
Extension issue
Asked if PSUs like NHPC and Oil India would get extension if they are unable to come out with the public issue within the stipulated time, he said Sebi’s nod has one-year validity and the same rules would apply to them.
Time granted
As per the clearances given by Sebi for the draft shareholding prospectus, the two PSUs have time till September to launch their public issues and in case it is delayed beyond this point, they will have to start the process afresh.
“The first thing (that it will do is, if PSUs)... want any additional capital you have to go by what capital raising norms for listed companies are”, Bhave said.
Secondly, he added, the listing will subject PSUs to the financial discipline as their activities would be watched everyday by the stock market. “The stock market (will be) making a judgement on what you are doing”, he added. The PSUs, Bhave added, would also be required to come out with quarterly reports as part of the listing requirement which will even be good for the government. “The listing will also get you their quarterly results and you know more on the up to date basis as to what is happening in the PSUs. So in a sense, it is good for the government as well. So that is a welcome thing”, he added. The government wants state-owned companies to get listed on the stock markets so that people can own their shares. The PSU listing, however, will be subject to government retaining 51 per cent stake in the them.
Requirement for listing
Meanwhile addressing the Sebi Board the Finance Minister believed to have reiterated a minimum of 25 per cent public holding in a company to remain listed.
