The finance ministry has extended the August 2017 deadline for listed PSUs to achieve the minimum 25 per cent public shareholding norm by one year, a finance ministry order said. The Centre is required prune its shareholding in government companies to 75 per cent in order to meet the rules of the Securities and Exchange Board of India. These rules have been specified to ensure wider shareholding of listed companies. With a series of share sales lined up by the Centre, a relaxation in cutting stakes would help the government in staggering its disinvestment plans appropriate time.
The finance ministry, in a notification last week, has amended the Securities Contracts (Regulation) Rules, 1957, to give to Central Public Sector Enterprises four years from September 2014 to meet the minimum public float requirement. The Securities and Exchange Board of India (Sebi) had mandated a minimum 25 per cent public float for all listed companies. This was extended to state-owned firms who were initially given three years to meet the norm. The three-year deadline as notified by the Ministry in September 2014, was due to end on August 21, 2017.
There are 6 PSUs — SJVNL, HUDCO, Coal India, Hindustan Copper, MMTC, Neyveli Lignite, which are yet to reach the minimum 25 per cent public shareholding requirement. Apart from selling stakes in companies that are already listed on the exchanges, the government has pipeline for coming up with IPOs.