Moneycontrol
Nov 07, 2017 09:07 AM IST | Source: CNBC-TV18

Think proposal to increase minimum public shareholding is called for: Prithvi Haldea

Government sources say that report of raising Minimum Public Shareholding (MPS) is pure speculation. In an interview to CNBC-TV18, Prithvi Haldea, MD, Prime Database and Ajay Srivastava, CEO of Dimensions Corporate Finance Services shared their readings and views on the same.

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Government sources say that report of raising Minimum Public Shareholding (MPS) is pure speculation. Earlier there were reports that the government or Securities and Exchange Board of India (SEBI) is looking to raise the MPS from 25 percent currently all the way up to 30 percent. There are nearly 40 listed companies in excess of Rs 10,000 crore marketcap which have the promoter shareholding at that 75 percent mark and above. So if they had to lower that, the float would increase by close to around Rs 1 lakh crore in the overall market but as of now, these reports are purely speculation.

In an interview to CNBC-TV18, Prithvi Haldea, MD, Prime Database and Ajay Srivastava, CEO of Dimensions Corporate Finance Services shared their readings and views on the same.

I think it is called for, for a variety of reasons. First of all in the good old times, 40 percent of a company had to be offered to public for listing then it gradually brought down to 25 percent. Limited float means entire company is under a promoter and we have seen issues of corporate governance coming out of that, Haldea said.

We have got too many disruptive elements, we don’t want another one, said Srivastava.

25 percent is good enough, there is no issues on transparency and there is no proof to say the institutional holders playing a much more active role in governance by greater holding, Srivastava added.

For entire discussion, watch accompanying video...
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