SEBI opens new private placement window for PSU divestment

The Securities and Exchange Board of India (SEBI) has created a new mechanism that would facilitate divestment of government stake in public sector undertakings by institutional placement of equity through stock exchanges.

This, according to SEBI, would allow wider participation in the dilution of promoter holding in listed companies in a transparent manner.

SEBI has now allowed promoters of all listed companies to dilute their holding by offering them for sale through a separate window provided by the stock exchanges.

To begin with, the facility of offer for sale of shares will be available on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE), SEBI said in a release.

The facility will be open to all promoters or promoter group entities of such companies that are eligible for trading and are required to increase public shareholding to meet the minimum public shareholding requirements.

Companies would also be allowed to issue fresh equity to institutional investors to dilute promoter stake as per the new guidelines.