It’s official. Whatever reasons the government earlier gave for amending stock market listing norms—better price discovery and corporate governance—the real motive behind its plan should now be clear. It is looking to pawn the family silver for as much as possible.
The government had mandated in June that listed companies would have to freely float 25% stock. So state-owned firms would have to sell more stake, raking in more cash.
But the government seems to have wised up. Offer too many shares, and that too of so many state-owned firms, and investors won’t buy them. Hence the decision, made public on Monday, that state-owned firms won’t have to raise their public shareholding to 25% till 2014. Yet, this relief extends only to the public sector. If the government was truly interested in market reforms across the board, this inequality wouldn’t exist. No doubt, then, its interest lies in maximizing its revenue.