Millennium Post

‘Assured by Govt about PSUs meeting public float deadline’

Market regulator Securities and Exchange Board of India (Sebi) on Thursday said that the government has assured it that the public sector units will meet the August deadline to bring down their promoter stake to 90 per cent.
'I have been assured by the government that they will follow the deadline,' Sebi chairman U K Sinha told reporters on the sidelines of the Skoch banking summit here.

As per the minimum public shareholding norms, the government-run companies shall have a minimum public float of 10 per cent by August and private sector companies had to bring down promoter stake to 75 per cent by June 3 this year.
Currently, there are about 11 PSUs in which the government holds over 90 per cent stake. These include MMTC, HMT, National Fertilizers, Neyveli Lignite Corporation, RCF, State Bank of Mysore and STC.Despite giving three years to the private sector companies to reduce promoters stake, as of June 3, there were as many as 105 companies which failed to meet the deadline forcing Sebi to take punitive actions against them.
On retail participation in the secondary market, Sinha said this is not at a level to be very happy about. 'We had a requirement that promoters must have less than 75 per cent shareholding in a company.'In spite of three years of time being given, while a large number of corporates followed our guideline, over 100 of them for some reason or the other could not do that. Very reluctantly Sebi had to take action against them two days ago,' he said.
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