All PSUS comply with stake norms

State- run firms meet Sebi deadline in increasing public stake

Listed public sector companies have clearly outsmarted their private counterparts in complying with the minimum public shareholding norms.

The capital market regulator Securities and Exchange Board of India ( Sebi) had set a deadline of August 8 for all listed PSUs to bring down the promoter holding to 90 per cent and all listed PSUs have met the regulatory requirement.

The government last week sold shares in four entities while Sebi gave relaxation in the case of five other ailing state owned entities like HMT, Fertilizers Chemicals Travancore, Hindustan Photofilms, ITI, Andrew Yule Company and Scooters India. They were allowed to transfer shares in excess of 90 per cent to a specially created fund by the government, only to be sold at a later date.

Earlier in June, the regulator had taken action against 105 private listed companies for failing to comply with the minimum public shareholding norms, the deadline for which ended on June 3, 2013.

With the secondary market remaining highly volatile and investors sentiment at an all time low, the stake sale by PSUs to comply with the minimum public shareholding seemed a daunting task. Till two months back, there were around 12 PSUs, which had to pare their government holding to meet the SEBI requirement.

However, by offering shares at a steep discount to the market price and a little support from the regulator, the government ensured full compliance with the regulatory requirement.

For instance, in the case of Neyveli Lignite, the regulator accepted the proposal of the Tamil Nadu government wherein the entire lot of 5.97 crore shares was sold to entities owned by the state government through the institutional placement programme.