15th Feb 2010

Securities and Exchange Board of India (SEBI) told the government that it is interested giving the companies, whether government- and privately-owned, five years to increase their public shareholding to 25 per cent.

The government will have to amend the Securities Contract Regulation Rules. At present, companies are subject to different public shareholding criteria depending on sector, ownership and share issue size.

It is proposed that exempted companies and companies that have 20 million shares outstanding and a market cap above Rs 1,000 crore are required to maintain a minimum 10 per cent public shareholding to remain listed. For all other companies, promoters are required to raise the public shareholding to 25 per cent if it falls below that level after an IPO.

However, state-owned firms, infrastructure companies and companies referred to the Board of Industrial and Financial Reconstruction have been exempted from the continuous listing requirement as well.