Sunday, 19 November 2017

SEBI IS CONSIDERING TO INCREASE MINIMUM PUBLIC SHAREHOLDING FROM 25% TO 30% OR 35%


In order to increases more liquidity in the Indian stock market and for better corporate governance SEBI is considering increase in Minimum public shareholding from current 25% to 30% or 35%. SEBI the stock market regulator is at the nascent stage of discussion for rise in public holdings. This step of proposing further rise in minimum public shareholding to 30% to 35% shall lead to mandatory float of shares from promoter group in the market at prevalent price. This move will help to reduce price manipulation in the stock market and bettering cooperate governance.

In 2010 SEBI had floated the circular for all non –public sector companies to have minimum 25% public holding, and were given period of 3 years to compile to the same. In 2014 SEBI further extended this circular for PSU companies to maintain minimum 25% public holding and compile with the same within the period of 3 years.

SEBI had also instructed the exchanges in its circular on “Non- Compliance with Minimum Public Shareholding (MPS) Requirement “that if the listed companies failed to follow the circular of minimum public shareholding than they shall be penalized with fine of Rs.5000 per day and freezing of promoter’s shares.



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