SEBI on Thursday allowed two additional measures for listed companies to comply with the 25 per cent minimum public shareholding norms. It has permitted promoters to sell up to 2 per cent stake by qualified institutional placement (QIP) or through open market sale of shares.

SEBI norms require every listed firm to maintain a minimum public shareholding of 25 per cent.

A newly-listed company is given two years to comply with these norms.

Currently, companies can sell shares through issue of shares to public through prospectus, offer-for-sale to public through prospectus, sale of shares held by promoters through secondary market institutional placement programme, rights issue to public shareholders and bonus issue of shares.

Volume rider

According to SEBI, companies can now sell shares up to 2 per cent held by the promoters/promoter group in the open market. This is subject to five times average monthly trading volume of the shares of the listed entity.

Further, the regulator said that the listed entity will announce the details to the stock exchange, at least one trading day prior to such proposed sale.

The details include the intention of the promoter to sell and the purpose of sale, the details of the promoter who proposes to divest the shareholding, total number of shares and percentage of the stake proposed to be divested and the period within which the entire divestment process will be completed.

Undertaking

“The listed entity shall also give an undertaking to the recognised stock exchange(s) obtained from the persons belonging to the promoter and promoter groups that they shall not buy any shares in the open market on the dates on which the shares are being sold by the promoter(s)/promoter group,” SEBI said.

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