Govt eases Minimum Public shareholding norms for PSUs 

The Centre has amended the securities contracts(Regulation) Act for Strategic disinvestment to exempt listed companies like it in which the government and public sector undertakings (PSUs) together or individually hold majority stake from the minimum public shareholding norm.

As per the latest Gazette notification, government can exempt any listed central, state or PSU owned entity from the minimum public shareholding. Exemption shall be valid for the period specified by the government. This exemption shall continue for the said period even in case of change of control.

According to the market regulator SEBI norms, a company is required to have a minimum public shareholding of 25 per cent within one year of the merger/acquisition of a company or three years after listing.

This decision by government of exempting minimum public shareholding for Public sector banks, and CPSEs will help in proceeding with IDBI Stake sale.

The public holding in IDBI Bank is just 5.28%, which is majority-owned by LIC and the government. On October 7, the Centre invited expression of interests for IDBI Bank and offered to sell a total of 60.72% stake in the bank, including 30.48% from the government and 30.24% from LIC, along with the transfer of management control in IDBI Bank. Yet, both the government and LIC together will have a 34% residual stake in the lender (19% by LIC and 15% by the government).

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