The Indian government yesterday amended the new listing norms for public sector enterprises (PSEs) by lowering the minimum limit of public shareholding in listed PSEs from 25 per cent to 10 per cent, bringing a sigh of relief to both state-run firms as well as investors.
The finance ministry has issued a notification revising the Securities Contracts (Regulation) (Amendment) Rules, 2010 which was notified on 4 June 2010. Apart from lowering the limit, it provides flexibility to all PSEs in attaining the 10 per cent public shareholding limit within three years without any annual floor.
However, for the private sector the threshold will remain as 25 per cent over a period of three years.
The previous amendment in June provided for all listed companies to raise a minimum of 25 per cent public shareholding from the prevailing 10 per cent requirement. (See: Listed companies required to maintain 25 per cent public holding).
It also mandated the listed companies with public holding below the 25 per cent floor level to hike it by at least 5 per cent a year to reach the limit.
However, a week later, based on the feedbacks received from PSEs and other stakeholders, the finance ministry indicated that there could be changes in the ruling. (See: Government may roll back new listing norms)