AB Capital to pare 5% stake in Aditya Birla Sun Life through OFS

19 Mar 2024 , 10:35 AM

To meet the minimum public shareholding standards, Aditya Birla Capital will sell about 4.99% of its investment in Aditya Birla Sun Life AMC via an offer for sale (OFS).

Under the OFS, AB Capital will sell about 1.43 Crore shares via the stock exchange mechanism.

Aditya Birla Capital’s Asset Monetisation Committee has given the green light for the sale of up to 1,43,88,662 equity shares of Aditya Birla Sun Life AMC, amounting to 4.99% of the total issued and paid-up equity share capital, through an offer for sale, as stated in a filing by AB Capital.

The minimum public shareholding requirement requires all listed firms to guarantee that non-promoters control at least 25% of their equity shares.

A large promoter holding might result in an artificial mismatch between demand and supply since fewer shares are available for the public to buy and sell.

As a result, Sebi rules require all listed firms to have a public float of at least 25%, with few exceptions. PSU banks, for example, have been granted till August 2024 to satisfy the regulations. To comply with the minimum holding rule, promoters of listed firms might sell the extra ownership through an OFS, rights issue, bonus issue to public shareholders, or even a qualified institutional placement.

Sebi had previously urged exchanges to monitor measures used by listed businesses to enhance their public holdings and conform with the requirements, and any noncompliance detected by the bourse would be reported to the regulator quarterly.

Aditya Birla Sun Life is now majority-owned by promoters (86.47%), with the remainder held by public shareholders. Among the promoters, AB Capital owns about 49.99% of AB Sun Life.

AB Sun Life AMC manages investment of AB Sun Life MF, a registered trust under the Indian Trusts Act. AB Sun Life AMC also offers a variety of alternative methods, such as portfolio management, real estate investments, and alternative investment funds (AIF).

It is one of India’s top asset managers, managing over 7.98 million investor portfolios with a total AUM of ₹3.24 Lakh Crore as of December 31, 2023.

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