BackSebi relaxes public float norms for Indian firms
The market regulator says it will not impose fines on companies that are unable to achieve the minimum public shareholding of 25% between 1 March and 31 August
PremiumMUMBAI : The Securities and Exchange Board of India (Sebi) on Thursday scrapped fines on listed companies unable to meet the minimum public holding norms, continuing its efforts to help businesses navigate the current turmoil.
The market regulator said it will not impose fines on companies that are unable to achieve the minimum public shareholding (MPS) of 25% between 1 March and 31 August.
A Sebi circular said fines levied by exchanges after 1 March will also be withdrawn. Under the rules, stock exchanges are to levy a penalty of ₹10,000 per day on companies for not meeting the public float requirement, with the amount credited to the investor protection fund of exchanges.
Only a handful of private sector firms are yet to meet the MPS limit, whereas more than 90 public sector undertakings are still to comply.
The relaxation will benefit companies where promoter holding has exceeded 75% due to open offers or other acquisitions.
The current MPS of 25% came into effect in 2013. The 2019 Union budget proposed to raise this to 35%; Sebi has not notified the change yet.
Sebi has been engaged in market consultations to remove compliance hurdles for companies during the pandemic. On Thursday, it eased the procedural constraints for takeover and buybacks.
Sebi chairman Ajay Tyagi attended a conference call on Wednesday with Ficci, wherein the industry body raised several issues in light of the lockdown such as raising of capital, corporate debt market and disclosures.
Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!
