FinMin to seek exemption on float norms for PSUs in red

The Finance ministry is set to ask for leeway from market regulator Securities and Exchanges Board of India over loss-making Public Sector Units (PSU) complying with the 10 percent public float norms, reports Aakansha Sethi quoting sources.

The deadline for PSUs to comply with the minimum public shareholding norms is the August 8. There was a meeting only today to discuss what should be done with loss making Public Sector Undertakings (PSUs).

There are about five-six PSUs that are listed but are loss making. On one hand they have to comply with Sebi's mandatory 10 percent public float norm and on the other the government has a divestment policy where companies that are profit making for the last three years only are divested. So, if a company has made a loss in any one of the last three years then it can't be divested. Hence, with these five-six companies such as Andrew Yule, ITDC, Hindustan Photo Films, FACT and HMT, the government is going to write to SEBI seeking an exemption for the mandatory 10 percent float.

For all the others which are profit making for instance National Fertilizers Limited, Hindustan Copper, Neyveli Lignite and ITI, the government is going to go ahead and meet the August deadline.