The Securities and Exchange Board of India on Wednesday amended its rules to allow promoters to use rights and bonus issue of shares for dilution of their stake to meet minimum public holding norms. Market regulator also said it would consider any further relaxation in this matter on case by case basis.
SEBI has allowed promoters to use rights and bonus issue routes to achieve minimum public shareholding norms only if they forego their entitlements. This means that promoters will have to necessarily refrain from subscribing to rights and bonus issues.
Foregoing the entitlement would enable promoters of listed companies achieve 25 per cent public shareholding by the stipulated June 2013 deadline. Every shareholder is entitled to subscribe to rights and bonus issues.