Increase liquidity in market, have more of public listing, Tyagi tells firms that don’t meet 25% mandate
Nearly half of the government-owned listed companies are yet to comply with the minimum public shareholding norms that stipulate that at least 25% stake should be held by the public, said Ajay Tyagi, Chairman, Securities and Exchange Board of India (SEBI).
“Out of 91 listed PSUs (public sector undertakings), 45 PSUs don’t meet the 25% minimum public shareholding norms so they actually need to come forward and increase the liquidity in the market and have more of public listing,” Mr. Tyagi said while addressing a capital market seminar organised by industry body CII.
“This is something which can be done and I think should be done. We have conveyed to the government also,” he added.
This assumes significance as the government, in the Union Budget early this year, proposed increasing the minimum public holding in all listed entities to 35% from the current 25% limit. Incidentally, the capital markets regulator mandated the current 25% minimum public shareholding norm way back in 2010, with which nearly half of the PSUs are not yet compliant.
According to the SEBI chairman, there are public issues cumulatively worth ₹25,000 crore in the pipeline, but lack of confidence in the market is acting as a deterrent for companies to go ahead and launch the initial public offer (IPO).
“My view is that this has to be kick-started with some bit of confidence building and this I feel that the government divestment of PSUs in the remaining part of this year… should come in a big way in the market,” Mr. Tyagi said.
‘Infosys probe on’
The SEBI chairman said that a regulatory probe is on in the Infosys matter while making light of the recent statement by Infosys Chairman Nandan Nilekani that even God could not change the numbers at the firm.
“You have to ask him or you can ask God,” Mr. Tyagi told reporters on the sidelines of the conference.
“Investors should draw their own conclusions. Whatever we have to do, we are doing. Whatever is the outcome, you would know,” he added.
On Wednesday, Mr. Nilekani had said that the software services company operates with the highest integrity, and that “even God can’t change the numbers of this company.”
Interestingly, the statement from the Infosys chairman came even as the company is yet to receive the report by an external law firm that has been appointed to look into the allegations made by the whistle-blower.