Finance Ministry May Write To SEBI For Relaxing Minimum Public Float Norms For PSUs
The finance ministry is considering writing to markets regulator SEBI seeking relaxation for certain state-owned firms from meeting the minimum 25 percent public shareholding norm.
There are over a dozen public sector units, including those up for strategic sale, which are yet to meet the minimum public holding norm -- the deadline for which ends in August.
“The ministry is mulling writing to SEBI outlining those PSUs which need relaxation since they are candidate for strategic sale or are being considered for merger with similarly placed PSUs,” an official told wire agency PTI.
Listed PSUs have already been provided one year extension, till Aug. 21, to comply with the norms.
Currently, several methods are available to listed companies to comply with the requirements. These include issuance of shares to public; offer for sale; sale of shares held by promoters through secondary market institutional placement programme; rights issue to public shareholders; and bonus shares to public shareholders.
Also qualified institutional placement and sale of shares up to 2 percent held by promoters or promoter groups in the open market through block and bulk deal can be done to achieve the minimum 25 percent public float.
While Government holds 78.55 percent in Coal India, in MRPL it holds 88.58 percent and 76.05 percent in Hindustan Copper.
It holds 89.93 percent in MMTC, 90 percent in STC, 89.73 percent in SJVNL and 84.04 percent in NLC India.
In Andrew Yule and Co. government holds 89.25 percent, in Scooters India (93.74 percent), KIOCL Ltd. (99 percent), ITDC (87.03 percent), Madras Fertilisers Ltd. (85.27 percent). In Hindustan Photo Films and Fertilisers and Chemicals Travancore Ltd. the Centre holds 90 percent each.
With regard to ITI Ltd., in which the government holds 92.63 percent, the Cabinet last month cleared a follow on public offer to help the telecom PSU meet the public shareholding norm.
Centrum Broking Senior VP and Head of Research (Wealth) Jagannadham Thunuguntla said “of the list, Coal India disinvestment can be quite important to watch in terms of both strategic importance and quantum of disinvestment proceeds involved”.
To promote a wider investor base in listed state-run companies and provide a boost to the government plan to raise funds from disinvestment programme, the SEBI board had in June 2014 asked listed companies to offer at least 25 percent of their equity to non-promoter shareholders.
Accordingly, the rules were notified for PSUs to achieve the minimum 25 percent public shareholding by August 21, 2017, later extended by a year.
In the current fiscal the government aims to mop up Rs 80,000 crore through PSU disinvestment, against Rs 1 lakh crore collected last fiscal which ended on March 31.