Minimum public shareholding: 100 firms commit on Sebi deadline

Last Updated: Sat, Dec 22, 2012 07:27 hrs

With the deadline for meeting minimum public shareholding norms just about six months away, about 100 private sector companies have expressed their willingness to reduce promoter shareholdings to comply with the guidelines set by the Securities and Exchange Board of India (Sebi).

The market regulator has also written to Cabinet Secretary Ajit Seth to again push public sector companies to meet the deadline for enhancing public shareholding, in accordance with the norms.

A senior Sebi functionary told Business Standard that the regulator had held one-to-one meetings with private companies in Mumbai, Chennai and Kolkata. "Doubts have been cleared and they have committed to reduce their stakes to meet public shareholding norms through various windows available for doing this, including offer for sale (OFS)," he added.

Private companies& PSU's
Name In % Name In %
Bombay Rayon 93.15 Hind Copper 99.59
Fres.Kabi Onco. 90.00 MMTC 99.33
Astrazeneca Pharma 90.00 HMT 98.88
Puravankara Projects 89.96 F A C T 98.56
BOC India 89.48 National Fertilizer 97.64
Omaxe 89.14 Scooters India 95.38
Gillette India 88.75 Neyveli Lignite 93.56
M R P L 88.58 Andrew Yule & Co 93.30
Thomas Cook (I) 87.10 ITI 92.98
Bajaj Corp 84.75 R C F 92.50
&Filtered for BSE 500 companies; according to the holding pattern in Sept 2012
Data compiled by BS Research Bureau

The official said at least two dozen private companies have already complied. The list of companies includes Wipro and Godrej Properties, among others, which have done it through restructuring, institutional placement programme (IPP) or the OFS route.

About 175 private sector companies held more than 75 per cent promoter holding as on March 31, 2012. Public sector companies with over 90 per cent shareholding numbered 14.

According to the Sebi guidelines, private sector companies have to increase the public shareholding to 25 per cent and public sector companies have to do the same to 10 per cent. The deadline for private sector companies is June 2013 and for public sector companies, it is August 2013.

Sebi estimates in July this year indicated that listed companies would have to sell shares worth Rs 32,000 crore to comply with the minimum public shareholding norms – Rs 11,000 crore from the public sector companies and the rest from private sector companies.

The official said, "Now, everybody has started co-operating after Finance Minister P Chidambaram's strict ruling on meeting the public shareholding norms". The regulator has already given one-to-one approval to four private sector companies which wanted special permission.

In case of the public sector companies, the official said the current letter to the cabinet secretary was the third in the series of communications sent to the government to expedite the process for PSUs to meet public shareholding norms.

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