Finance Minister Nirmala Sitharaman on July 5 announced in the budget speech that the government had asked the Securities and Exchanges Board of India (SEBI) to consider increasing the minimum public shareholding norms to 35 percent, up from 25 percent.
The requirement of a minimum public float of 25 percent was introduced in 2010 for all non-public sector undertakings, which were given three years’ time to adhere to the new rule.
Public sector undertakings came under the ambit of this rule when in 2014, the government made it mandatory for all PSUs to have a minimum public shareholding of 25 percent and gave them three years to make it happen.
“The proposal to increase the minimum public shareholding from 25 percent to 35 percent is good for the market perspective. Stock floating and volume may increase many listed PSUs stocks floating will increase,” Sanjeev Jain, VP Equity Research, Sunness Capital India told Moneycontrol.