The Securities and Exchange Board of India (Sebi) today asked companies to categorically state whether shares of the custodians, against which depository receipts (DRs) are issued, belong to the promoter or non-promoter entity, a move that will have repercussion for the 25 per cent public holding norms issued recently.
"In the quarterly shareholding pattern, disclosure of shares held by the custodians, against which depository receipts have been issued, shall be classified as promoter/ promoter group and non-promoter," market watchdog Sebi said in a statement after a board meeting here today.
Analysts say the move will have implications for the recent government directive to all listed firms to have at least 25 per cent public holding. "If such a classification is made, it will be taken into account while calculating 25 per cent public holding norm,"CNI Research's Kishore Ostwal said.
The most common form of DRs are American depositary receipts (ADRs), which are issued to investors in the US and listed on the bourses there, and global depository receipts (GDRs), which are issued to European investors and listed on the Luxembourg bourse.
Experts also say the move will lend transparency to the shareholding pattern as currently promoters use voting rights entrusted with custodians of DRs for taking decisions.
"Companies like Infosys will now have to bifurcate the promoter and non-promoter holding pattern. This is a move to bring in transparency about the holding by the custodian," SMC Capitals equity head Jagannadham Thunuguntla said.
At the end of the June 2010 quarter, the custodians hold 18.61 per cent in Infosys.
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The Sebi also mandated that if the shareholding pattern of a corporate changes by 2 per cent after a "corporate event", that has to be reported within 10 days. Corporate events include bonus issue, big mergers, stock split, capital reduction, rights issue, preferential allotment and PE deals.
"Whenever the change exceeds 2 per cent of the paid-up share capital of the company post a corporate event, the company shall file revised shareholding pattern with the stock exchanges within 10 days", Sebi said. But it seems that block or bulk deals are out of the ambit of the new disclosure norm.
"Sebi has now mandated that shareholding details post-corporate revamp be made available to shareholders sooner. However, one may argue that block and bulk deals does not come under corporate event as it is sold and brought in the open market," Thunuguntla added.
Besides, Sebi has also asked the unlisted firms to disclose their shareholding pattern a day before listing. "The company shall file shareholding pattern as open clause 35 one day prior to the date of listing, which shall be uploaded on the Website of the exchanges before commencement of trading."
These documents are right now available in the IPO prospectus and companies used to file it to the exchanges in the immediate next quarter post-listing.