The Securities and Exchange Board of India (SEBI) is planning to take the budget proposal which seeks to hike minimum public shareholding of listed companies to 35%, to its its expert committee on primary markets.
It will be examined if all companies must be given the same time to comply with this rule, or if public sector units must be asked to stick to a separate timeline.
It may be recalled that in her budget speech, Union Finance Minister Nirmala Sitharaman, had asked SEBI to examine the proposal of increasing shares held by the public to a minimum 35% from 25% at present.
If the proposal is to be implemented, regulatory amendments would have to be in line with existing laws, including the Companies Act.
Currently, SEBI rules mandate companies with a post-issue capital of less than or equal to Rs 1,600 crore to undertake an initial public offering of 25%, while large companies have more time to meet this requirement.
Incidentally, this is not the first time that the government has sought to enhance the public float in listed companies.
The SEBI had given Indian companies three years to meet the minimum public shareholding threshold of 25%, in 2010 as well.