Govt assures SEBI on meeting public float norms deadline

India Infoline News Service | Mumbai |

According to SEBI guidelines, PSUs are required to divest about Rs. 40 billion before August 8, 2013 to meet the 10% public float norms

The Securities and Exchange Board of India (SEBI) on Thursday said that the government has assured it that the public sector units (PSUs) will meet the August deadline to bring down their promoters’ stake to 90%.

According to SEBI guidelines, PSUs are required to divest about Rs. 40 billion before August 8, 2013 to meet the 10% public float norms.

Currently, there are about 11 PSUs in which the Government holds over 90% stake. These include Neyveli Lignite Corporation, Rashtriya Chemicals and Fertilizers, and State Bank of Mysore.

The Securities Contracts (Regulation) Rules, 1957 were amended in 2010 to provide for minimum and continuous public shareholding requirement in listed companies in private sector at 25%.

According to the rules, all listed companies have to comply with the said requirement by June 3, 2013.

This was done with a view that a dispersed shareholding structure is essential for the sustenance of a continuous market for listed securities to provide liquidity to the investors and to discover fair prices.

There were two hundred such companies which were non-compliant with the above requirement as on June 30, 2012. For some of the companies the due date of compliance falls beyond June 3, 2013.


 

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