| SEBI
is planning to set a two-year deadline for increasing
the minimum non-promoter stake in listed companies.
All listed companies are required to maintain on
a continuous basis their non-promoter holding at
the same level as applicable at the point of entry
into the market, which is usually 25%, or 10% in
some cases. As of now, non-promoter holding in many
A, B1, B2 and Z group companies is below 25%.
Existing
listed companies, where the non-promoter holding
is less than the applicable limit at the point of
entry, will be given up to two years to raise the
level. Promoters could either offload shares through
an offer for sale, or companies could issue fresh
shares to the public to meet the norms under the
listing agreement. If they fail to do so, they will
be required to buy out the public holding.
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Our Say |
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| SEBI
had in ’01 taken a decision
to ask companies to maintain a
minimum 25% floating stock on
a continuous basis. However, it
has not yet enforced this strictly.
Many domestic companies had come
out with public issues amounting
to 25% of their total equity.
Subsequently however, the holding
of promoters has gone up to levels
as high as 90% in some cases,
and over 75% in many others. This
means that the floating stock
of some of these companies has
shrunk to below 10%. |
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It
is expected that SEBI may even ask the Central
Listing Authority (CLA) to fix the price of
shares for the public offer if the companies
fail to do so. Exemption will be given to
companies, which have come to the market with
a 10% offering. But they will have to maintain
their holding at 10% levels. Some IT and telecom
companies were allowed to list 10% of their
equity.
According
to SEBI sources, a circular will be soon
issued directing |
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