The Hindu Business Line : `240 listed companies are flouting norms'

Mumbai May 15 Some 240 listed companies have flouted listing norms relating to minimum public shareholding, according to Mr Pawan Kumar Bansal, Minister of State (Finance).

According to April 2006 guidelines, companies (except Government-owned and infrastructure companies) are required to have a minimum 25 per cent public shareholding.

Companies that have issued less than 25 per cent but have 10 per cent public holding and those with a market capitalisation of over Rs 1,000 crore or two crore issued shares are exempted from the provision.

These companies will have to maintain 10 per cent public shareholding.

Companies such as Hindustan Copper Ltd have as little as 0.49 per cent public shareholding, while MMTC Ltd has 0.67 per cent.

The public shareholding in Manipal Finance Corporation Ltd stands at 2.97 per cent, according to BSE data.

"These companies may be non-compliant because the 25 per cent clause came into effect recently and not at the time of their listing. When they were listed, the listing norms were different," a merchant banker said.

2-year deadline

The SEBI has set a two-year deadline for companies to fall in line with the listing agreements, failing which they are liable to be delisted.

"It is a time-consuming process, which is why they have been given two years. First their scrip will be suspended and then they will be liable for delisting," said another merchant banker.

Merchant bankers believe that the non-compliance will not have an effect on the stocks of the companies as there have been offers for sale and follow-on issues in the recent past.

"This will lead to more liquidity and increased public holding. Hence, the stocks should not be affected negatively," said a merchant banker.

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