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Journalism of Courage
Amid volatile market conditions,industry body CII today sought two more years till June 2015 from SEBI for listed companies to comply with the mandatory norm of 25 per cent minimum public shareholding requirement.
“In view thereof,extension of time uptil June 2015 will help most companies in suitably complying with the norms and improving liquidity of the Indian capital market,” it said.
For listed private sector companies,SEBI has fixed the timeline till June 2013 and for the public sector undertakings it is August 2013.
Explaining the difficulties being faced by the companies impacted by the amendment of the Securities Contracts (Regulation) Rules in June 2010,it said that market conditions have challenged the ability of firms to comply with the minimum public float norms.
The BSE barometer Sensex today lost over 126 points on funds selling in auto,banking and realty stocks amid rupee breaching the 56-mark against the dollar and a insipid trend in the global markets.
It said that there are 148 private sector and 14 public-sector companies which would need to dilute their equity stake in order to meet the minimum public shareholding norms by June 2013 resulting in compulsorily offloading of an aggregate amount of Rs 34,860 crore between June 2012 and June 2013.
Further,it said,SEBI approvals have been granted for IPOs aggregating to Rs 11,000 crore and further prospectuses seeking to raise a collective amount of Rs 9,000 crore are awaiting SEBI approval,it said.
“Under the present market conditions,there is a huge risk that such large supply of paper in the market can further depress share prices across board,dampening the interests of public shareholders,” it said.
“Resultantly,a mandated offloading of shares would result in a sharp decline of share prices,thereby leading to destruction of shareholders’ value,” it added.
