Budget impact: Higher public float may not be tax-accretive for Centre

Higher weight in global indices, better price discovery, more control to minority shareholders, and windfall tax mobilisation on account of long-term capital gains (LTCG) booked by promoters, are among the benefits being talked about following the proposal to increase minimum public shareholding in listed firms to 35 per cent, from 25 per cent at present.

The higher float may end up benefitting minority shareholders. However, the move may not prove to be very tax-accretive for the government, at least at current stock prices.

An analysis of shareholding data shows that there are at least 1,110 listed companies with promoter holding