The government has raised the threshold for public shareholding in listed companies with an aim to avoid promoter manipulation and to increase equity participation in markets. All listed companies will now be required to maintain 25% public holding.
All listed entities would have to dilute at least 5 per cent additional equity annually till they reach the threshold limit of 25 per cent. And fulfilment of this condition would be must to remain listed.
The new rules were announced shortly after close of stock market. The BSE benchamrk Sensex, which rose by 95 points today on top of a 450-point rally in past two days, could come under pressure on Monday, analysts said.
For a company seeking listing, it would have to dilute 25 per cent in one go in case the issue size is just up to Rs 4,000 crore. However, those already in the process of going public and have filed draft prospectus could disinvest stipulated 10 per cent and later meet the condition notified today.
The decision on mandatory increase in public exposure of a company to 25 per cent had been hanging fire for more than a year due to differences the market regulator Sebi had with the Finance Ministry.
The new rules were announced shortly after close of stock market. The BSE benchamrk Sensex, which rose by 95 points today on top of a 450-point rally in past two days, could come under pressure on Monday, analysts said.
For a company seeking listing, it would have to dilute 25 per cent in one go in case the issue size is just up to Rs 4,000 crore. However, those already in the process of going public and have filed draft prospectus could disinvest stipulated 10 per cent and later meet the condition notified today.
The decision on mandatory increase in public exposure of a company to 25 per cent had been hanging fire for more than a year due to differences the market regulator Sebi had with the Finance Ministry.
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