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All public sector units (PSUs) have complied with the equity market regulator the Securities and Exchange Board of India (SEBI) guideline to have 10% minimum public share holding by 8 August.
Eight of the PSUs including the banks namely Hindustan Copper, ITDC, MMTC, National Fertilizers, Neyveli Lignite, Rashtriya Chemicals & Fertilisers, State Bank of Mysore took the primary market route to comply with the same.
“This puts to rest the continuing concerns raised by several analysts that PSUs shall not comply citing one reason or the other and that some relaxation shall be granted to them,” says Pranav Haldea, director, Prime Database, a financial services research firm.
Neyveli, under the pressure of the Tamil Nadu State Government, used IPP route with preferential allotment to its own state undertakings to meet the guideline.
As per a recent decision by the cabinet committed on economic affairs, the excess Government holding in 6 other listed PSUs-HMT, Fertilizers & Chemicals Travancore, ITI, Andrew Yule, Hindustan Photo Films and Scooters India- shall be transferred out of government control to a special national investment fund.
As far as the private sector is concerned, 105 companies were non-compliant with the 75% public shareholding requirement on the 3rd June 2013 deadline, against whom SEBI had passed penal ordeRs According to Haldea, since then, 20 of these companies have complied with the requirement (13-OFS, 3-Bonus Issue, 1-IPP, 1-OFS & IPP, 1-OFS & Bonus, 1-Rights).
The total amount diluted by the Government in PSUs to achieve minimum public shareholding norm since 1st April 2011 has been Rs 2510 crore of which Rs 2086 crore was through the offer for sale through stock Exchange mechanism (OFS) route and Rs 424 crore through the Institutional Placement Programme (IPP) route. Both these instruments were designed specifically by SEBI for promoters to divest their holdings to meet with the norms.
According to PRIME, 64 private sector companies had already diluted their stake before the deadline of June 3rd (51-OFS, 7-IPP, 4-Bonus, 2-OFS & IPP together). Overall, from 1 April 2011 onwards, the total amount of dilution by these companies has been Rs 8227 crore through OFS, Rs 4960 crore through IPP and Rs 9 lakhs through a Right Issue (a total of Rs13187 crore). In addition, 9 companies had unsuccessful OFS, through which the promoters diluted shares worth Rs1055 crore.
