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Last Updated : May 29, 2013 11:30 AM IST | Source: PTI

15 cos start to comply with Sebi's public float norm

Racing to meet Sebi's minimum public shareholding norms, promoters of two companies on Tuesday reduced their stake, while 15 firms including Jet Airways, Essar Shipping and Tata Teleservices have already kickstarted the process.


Racing to meet Sebi's minimum public shareholding norms, promoters of two companies on Tuesday reduced their stake, while 15 firms including Jet Airways, Essar Shipping and Tata Teleservices have already kickstarted the process.


Also Read: Minimum shareholding rule: Market to see $2bn worth paper


AstraZeneca Pharma and Raja Bahadur International — have successfully sold their shares through offer for sale (OFS) route to meet the market regulator Sebi's deadline ending in June. Among the firms which have started the procedure to meet the Sebi's guidelines are — Monnet Project Developers, Aunde India, IO System, Sharp India, Sun TV Network, Digital Electronics, Jaypee Infratech, Adani Enterprises, Saint-Gobain Glass India, Novartis India and Advance Lifestyle.


Besides, many companies are expected to follow suit as market regulator Sebi's deadline is fast approaching. All the nine companies are taking the OFS mechanism to pare promoter holdings.


Six companies including Sun TV Network, Jaypee Infratech would see promoters sell shares tomorrow via OFS mechanism on the stock exchanges to meet guidelines. Promoters of seven firms- Jet Airways, Essar Shipping, Essar Ports, Adani Enterprises, Novartis India and Tata Teleservices (Maharashtra)- would offload their shares on May 30.


However, Digital Electronics had conducted a mock bidding session on Tuesday for the sale of shares through OFS mechanism. When contacted about share sale, Essar Group said: "We are taking necessary step to comply with statutory requirements."


As per Sebi's minimum public shareholding norms, all private sector listed companies need to have at least 25 percent public shareholding and promoters have been asked to lower their stake to 75 percent or below by June, 2013.


For public sector companies, minimum public shareholding has been fixed at 10 per cent and the deadline is till August 2013. These norms were announced in June, 2010 to ensure that the public investors get a larger presence and help create an equity culture in the country.


To help companies comply with the new public shareholding norms, Sebi in 2012 created two new routes — offer for sale (OFS) and institutional placement programme (IPP). The regulator also allowed companies to use rights and bonus issue routes to enhance public holding.


Until now, there have been about 44 OFS, eight IPPs and a few bonus issues by Indian firms to pare promoter holdings. Still, about 87 actively-traded companies, including 75 private entities and 12 state-run units, are yet to comply with the minimum public shareholding norms stipulated by Sebi, according to a report by Kotak Institutional Equities.

Over the next few weeks, promoters of these non-compliant companies would need to sell shares worth an estimated amount of Rs 15,000 crore, collectively, to meet the norms.

First Published on May 28, 2013 11:18 pm
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