BackFirms flood bourses to meet shareholding deadline
Eight companies float share offers, three fail to complete sale
Premium(Sebi may compel non-compliant companies to de-list, suspend trading in their stocks, impose a fine, prosecute or place curbs on voting and dividend rights.)
Mumbai: Eight companies offered to sell shares to ensure that they meet a minimum 25% public shareholding deadline that expires on Monday. Three of them failed to complete the sale.
On Friday, at least 92 firms had less than 25% public shareholding, out of which two have applied for de-listing from the stock exchanges. This leaves 85 companies not meeting the rules set by the Securities and Exchange Board of India (Sebi).
“When there is no market available for such share sales, what more can the companies do? They seem to have tried their best," said Deven Choksey, managing director and chief executive officer of Kisan Ratilal Choksey Shares and Securities Pvt. Ltd, a brokerage. The regulator may have to be accommodative in this regard, Choksey said.
Sebi may compel non-compliant companies to de-list, suspend trading in their stocks, impose a fine, prosecute or place curbs on voting and dividend rights.
Telecom company Tata Communications Ltd’s 2.8 million share issue was successful and was filled 1.6 times, BSE data showed. Realty company Omaxe Ltd’s offer for sale of 21.2 million shares was subscribed 27.9%, while BGR Energy Systems Ltd’s 44.2 million share issue was filled 50.8% at the end of trading.
Essar Ports Ltd’s issue was subscribed 75.9%, while smaller companies such as Rama Phosphates Ltd, Kartik Investments Trust Ltd, Lords Chloro Alkali Ltd and Marathwada Refractories Ltd saw their offers oversubscribed.
In a separate development, Oracle Financial Services Software Ltd informed BSE Ltd on Monday that the shareholding of promoter Oracle Global (Mauritius) Ltd had been reduced to 75% and that the company was in compliance with Securities and Exchange Board of India (Sebi) guidelines on minimum public shareholding norms, following an offer for sale.
In the wake of market volatility and to prevent concentration of wealth in the hands of promoters, former finance minister Pranab Mukherjee directed listed companies on 4 June, 2010, to raise the threshold for non-promoter, public shareholding to 25% from 10%. Later, the government changed the rule for state-run firms and ordered them to have at least a 10% public holding by August 2013.
Anirudh Laskar and Ruchita Saxena contributed to this story.
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