Azim Premji,promoter of IT major Wipro Ltd,has taken the philanthropic route to meet the market regulators stipulation of minimum 25 per cent public holding.
According to Securities and Exchange Board of India (Sebi) rules,listed private companies will have to increase public shareholding to a minimum of 25 per cent by June 2013.
The Sebi has approved the proposal of Wipro to meet the minimum public shareholding requirement through a transfer of equity shares by the promoter group to an Irrevocable Independent Trust with trustees either from public sector banks or public financial institutions for advancing philanthropic activities through its beneficiaries.
The Irrevocable Independent Trust will be categorised as public shareholding for the purpose of the minimum public shareholding criteria of 25 per cent specified under the Securities Contract (Regulation) Rules,1957 and clause 40A of the Listing Agreement,Wipro said on Thursday.
However,the company did not disclose how much stake will be transferred to the proposed trust. Azim Premjis family now controls 78.28 per cent stake in Wipro.
Wipro and the promoter group have undertaken multiple steps to fulfill the minimum public shareholding requirement including offer for sale (OFS), it said.
The demerger of the diversified business is also expected to increase public shareholding.
Any shortfall to meet public shareholding prior to due date of meeting the minimum public shareholding requirement would be transferred to the Irrevocable Independent Trust and the trust will effect a sale of such equity shares forming part of the trust funds within a period of two years from the date of such settlement,the company said in a statement.