The government’s move to enforce a minimum 25 per cent public holding in all listed firms should be put on hold for another three months, as a lot of ‘grey areas’ need to be cleared, Confederation of Indian Industry (CII) President Hari S Bhartia said today.
“Large capital firms, in fact all the companies, should be given more time. The government can give three months’ time. The policy announcement of June 4 can be treated as the concept paper, on which views of different stakeholders can be sought,” Bhartia said.
According to the new rules, both public and private sector listed companies will have to increase their public participation to at least 25 per cent.
The companies can achieve this threshold over a period of years but will have to offload at least five per cent per annum.
Bhartia said, while it was a good move for the long run and help the government's disinvestment process, in the short-to-medium term, there would be crowding out of resources.
“Too much paper (initial public offerings and follow on public offers) will chase the same money," CII chief said, adding that wider industry consultations should be held in the next few months before implementing the new rules.
