14 cos sell shares after SEBI’s shareholding deadline expires

At least 14 listed private companies have offloaded shares worth Rs 380 crore through offer for sale (OFS) to bring down promoter holding to 75 per cent after the deadline for complying with the minimum public shareholding ended last month.

The deadline expired on June 3 and a day later SEBI initiated action against as many as 105 non-compliant companies for failing to meet the norms.

Since then, at least 14 private companies sold shares via OFS route to meet the guidelines, but a large number of non-compliant entities are yet to achieve the minimum 25 per cent public shareholding.

According to information available with stock exchanges, the 14 companies that have met the norms as yet have collectively offloaded shares to the tune of Rs 380 crore.

Moreover, two PSUs - MMTC and Hindustan Copper - have also sold shares worth Rs 840 crore through the OFS route. All the listed public sector entities need to have at least 10 per cent public holding by August 8 and about 10 of them are yet to meet these norms.

Among the private sector entities that launched their OFS after June 3 included BGR Energy Systems, Sundaram-Clayton, Foseco India, Bhagyashree Leasing & Finance and Advance Lifestyles.

The directions issued by SEBI against 105 non-complaint entities include freezing of voting rights and corporate benefits such as dividend, rights, bonus shares and split of the promoters or promoter group of the non-compliant companies with respect to the excess of proportionate shareholding in respective companies.

These restrictions would be in place till such time these companies comply with the minimum public shareholding requirement.

The regulator also directed prohibiting the promoters or promoter group and directors of the non-compliant companies from buying, selling or otherwise dealing in the securities of their respective companies except for the purpose of complying with the norms. It also restrained them from holding any new position as a director in any listed company till such time these companies comply with the norm.

To help companies comply with the new public shareholding norms, SEBI last year created two new routes - OFS and institutional placement programme (IPP). The regulator also allowed companies to use rights and bonus issue routes to enhance public holding.

Interestingly, most of the companies have opted for OFS route over IPP and bonus issues.

Over the next few weeks, PSUs would need to sell shares worth an estimated of Rs 3,000 crore collectively to meet the norms.