The Hindu Business Line : Public ownership in listed cos — SEBI may use `number of shareholders' as criterion

THE Securities and Exchange Board of India is looking at the possibility of using the `number of shareholders' as a criterion for determining the level of public ownership in listed companies.

SEBI is in the process of framing regulations to stipulate a minimum level of public shareholding in listed companies.

This exercise is aimed at broad-basing the level of public shareholding.

"We are looking to set the criterion in terms of the number of shareholders. But we will not leave it there. Certain sub-conditions will also be added to this," Mr M. Damodaran, SEBI Chairman, told Business Line after delivering the inaugural Dr Stya Paul Annual lecture on `Regulatory issues in the context of Indian Capital Market' here on Saturday.

Indications are that SEBI may finally settle for a minimum 25 per cent public shareholding norm in listed companies.

The general perception is that this norm would be measured in terms of paid-up equity capital value or the number of outstanding equity shares of the company.

Currently, many companies in specified sectors continue to be listed in stock exchanges, even though their level of public shareholding is less than 25 per cent.

A number of listed companies have large promoter holdings, mainly through investment companies.

With the SEBI Chairman now indicating that the criterion would be in terms of the `number of shareholders,' analysts say that this may not really help in broad-basing public shareholding in listed companies.

This is because the promoters in their individual capacity and each of the investment companies would be counted as shareholders and a handful of public shareholders would be enough to comply with the proposed formula.

More Stories on : Regulatory Bodies & Rulings | Stocks

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Nokia to roll out 5 new models in 6 months

Bird flu virus caused poultry deaths in Maharashtra: Minister
Over 50,000 birds dead in Nandurbar district

Iranian field: ONGC may get stake on same terms as China's Sinopec

Cos head to rating agencies for IPO grading

Public ownership in listed cos — SEBI may use `number of shareholders' as criterion

Online trading clicks big with investors

PC shipments up at 4.3 million units in `05: IDC
HP retains top slot with 17 per cent market share