Mumbai: SEBI's deadline for achieving minimum 25 percent public shareholding in listed private sector firms ended Monday, with about 100 companies failing to meet the norms that mostly included entities whose shares are not actively traded in the stock market.
The market regulator has begun an internal consultation process to decide on the actions to be taken against the non- compliant companies, but any potential penalties would be mostly decided on case-to-case basis, sources said.
SEBI is of the view that the penal actions should be different for the entities that made attempts to meet the guidelines and for those with no intention of lowering their promoter holding to 75 percent or below.
However in both cases, the penal actions could be limited to promoters and the interest of minority shareholders would be safeguarded, a senior official said, indicating that delisting or trading suspension were unlikely actions if the guidelines are met in coming days.
The steps being considered include promoters being barred from certain activities in the market till the time they comply with the guidelines.
Without disclosing the names of the companies that are yet to meet the guidelines, the official said that most of them are entities whose shares are anyway not actively traded on the stocks and some of them are also already under suspended trading list for various reasons.
One company, Gillette India, has got an interim relief from the Securities Appellate Tribunal (SAT) after its proposed scheme to meet the guidelines was rejected by SEBI. There are a few companies that have begun the process of voluntary delisting after expressing their unwillingness to meet the guidelines and they would not face any actions.
Some of the companies were unable to meet the guidelines by a small margin, as their offers for sale were marginally undersubscribed. These included Fortis Healthcare, which needs to sell just one share to meet the guideline and it has been allowed to sell one share through the open market.
Adani Ports would offer to sell shares through Institutional Placement Programme on Tuesday, while Tata Tele failed to sell desired number of shares despite two attempts.
The companies were asked on June 4, 2010 to achieve minimum 25 percent public shareholding within three years and this deadline ended Monday. However, the norms for public sector entities were relaxed later on August 9, 2010 and they were asked to attain minimum 10 percent public holding in three years and that deadline would end on August 8 this year.
On their last day to meet the guidelines, nine private companies, including Tata Communications, hit the market today with offers to sell off shares worth over Rs 450 crore, while six of them could succeed fully.
The issues of BGR Energy Systems, Essar Ports and Omaxe could not get full subscription for the shares under offer, but they are likely to get other opportunities, including sale through open market, to meet the guidelines in a day or two.
During last month itself, more than 60 companies came out with offers to sell their promoter shares to meet the deadline and sold shares worth more than Rs 10,000 crore.
Major companies that recently sold shares include Jet Airways, Essar Shipping, Tata Tele, Novartis India, Adani Enterprises, Sun TV. Many of them were given one or more relaxations to meet the norms.