The market watchdog seems to be finally waking up. Sebi is now in favour of hiking the minimum size of public holding in a company from 10 per cent to 25 per cent of the equity capital.Currently, a technology company can offer a minimum 10 per cent to the public while it is 25 per cent for other companies. However, the delisting committee under Sebi has recommended a minimum 25 per cent public holding for all. ‘‘Many technology companies took advantage of the relaxation and offloaded only 10 per cent of the equity capital to the public for listing on the stock exchange,’’ said an analyst. Some of the tech companies even manipulated their share prices due to low liquidity in the market. ‘‘Sebi should make the minimum public holding level at 25 per cent. Tech companies which have public holding below 25 per cent should be asked to offload more holding to the public,’’ said a merchant banker. ‘‘We will take a view on the public holding at our board meeting in November first week,’’ Sebi executive director R.M. Joshi said on the sidelines of a Phdcci seminar on buyback in New Delhi on Saturday. He said a higher IPO limit would ensure greater liquidity of shares.Another contentious issue is MNCs and their subsidiaries. Said an analyst, ‘‘The Sebi committee seems to have overlooked the aspect of how parallel 100 per cent subsidiaries of MNCs adversely impact the valuation of the listed Indian arms. This loophole could be plugged by allowing a parallel 100 per cent subsidiary only after prior approval of shareholders, other than the parent, of the listed subsidiary is received.’’
