Market regulator — Sebi, on Saturday, said that all listed companies, including public sector units (PSUs), will have to meet the norm of minimum 25 per cent public holding by August next year.
“We have taken it up with government that the same (as for private sector companies) discipline should also apply to PSUs... people (PSUs) should try and honour whatever timeframe has been given,” Sebi Chairman U K Sinha said.
When asked if listed companies would be able to meet the requirement given the prevailing market conditions, he said, “To talk about whether it is practical or that only when market reaches a particular level, only then it will be sold...I think these are arguments which do not convince us.”
Sinha said listed companies were given three years time to meet the requirement of minimum public holding. He was talking to reporters on the sidelines of a Sebi workshop here.
While the private companies have to meet the norms by June 2013, for PSUs the deadline is August 2013.
Under a notification of the Securities Contracts Regulations (Amendment) Rules issued in 2010, the government made it mandatory for all listed entities to have a minimum public float of 25 per cent and stipulated the time limit.
As many as 181 companies from the private sector will need to sell shares worth about Rs 27,000 crore to meet the minimum public holding norms for listed firms, Sinha had said earlier. Besides, 16 Public Sector Units (which do not have 25 per cent public holding) will have to mobilise Rs 12,000 crore to adhere to the new public float norms.
In January this year, SEBI had introduced Institutional Placement Programme (IPP) and Offer for Sale of Shares Through the Stock Exchange with an aim to fast-track the sale of promoters’ equity in listed companies to meet minimum public shareholding norm. The Offer for Sale of Shares popularly known as auction route has since been used by three companies, including ONGC, to offload promoter’s shares.
