8 cos start process to comply with Sebi's public holding norm
New Delhi: With the deadline to meet Sebi's public shareholding norm ending next month, as many as eight companies including AstraZeneca Pharma and Sun TV Network have initiated the process of lowering promoter stake to 75 percent.
Among the firms which have started the procedure to meet the Sebi's guidelines are -- Monnet Project Developers, Aunde India, IO System, Raja Bahadur International and Digital Electronics.
Besides, many companies are expected to follow the suit as market regulator Sebi's (Securities and Exchange Board of India) deadline is fast approaching. All the eight companies are taking the offer for sale (OFS) route to pare promoter holdings.
Five companies would sell their shares tomorrow via OFS mechanism on the stock exchanges, while two firms -- AstraZeneca Pharma and Raja Bahadur International -- have already begun the process of offloading their shares today itself.
However, Digital Electronics is conducting a mock bidding session today for the sale of shares through OFS mechanism.
As per Sebi's minimum public shareholding norms, all private sector listed companies need to have at least 25 percent public shareholding and promoters have been asked to lower their stake to 75 percent or below by June, 2013.
For public sector companies, minimum public shareholding has been fixed at 10 percent and the deadline is till August 2013. These norms were announced in June, 2010 to ensure that the public investors get a larger presence and help create an equity culture in the country.
To help companies comply with the new public shareholding norms, Sebi last year created two new routes -- offer for sale (OFS) and institutional placement programme (IPP). The regulator also allowed companies to use rights and bonus issue routes to enhance public holding.
Until now, there have been about 44 OFS, eight IPPs and a few bonus issues by Indian firms to pare promoter holdings.
Still, about 87 actively-traded companies, including 75 private entities and 12 state-run units, are yet to comply with the minimum public shareholding norms stipulated by Sebi, according to a report by Kotak Institutional Equities.
Over the next few weeks, promoters of these non-compliant companies would need to sell shares worth an estimated amount of Rs 15,000 crore, collectively, to meet the norms.