NEW DELHI: Market regulator Securities and Exchange Board of India (Sebi) is contemplating 25 per cent public shareholding in public sector undertakings (PSUs) after similar norms were put in place for private sector entities. However, a final decision will be taken by the government.
Sebi, which regulates all listed companies, in its suggestion to the Finance Ministry has said that an increase in minimum public shareholding in listed PSUs are a part of its efforts to deepen the markets and increase public float.
However, a final decision is expected to be taken by new finance minister, Arun Jaitley, who assumed charge on Tuesday.
There are close to 30 listed PSUs where public investors hold less than 25 per cent stake, while the existing norms require a minimum public holding of only 10 per cent for them.
Sources stated that Sebi is of the view that the PSUs can be given a three-year time to meet the new norms if they are considered and put in place by the government.
The move would also help in promoting wider participation from investors and boost Government’s plan of raising funds through disinvestment, sources said.
A similar time-frame was given to private sector companies in 2010 to achieve minimum 25 per cent public holding, while PSUs were also given three years in the same year to increase their public shareholding to at least 10 per cent.
Sebi had earlier in June 2010 proposed that all listed companies — including PSUs — would need to have a minimum public shareholding of 25 per cent.