On Friday, at an event on Budget by the Confederation of Indian Industry, Finance Secretary Subhash Chandra Garg said that "All companies to have 25% Minimum Public Shareholding by August 2020". DIPAM secretary Atanu Bhattacharya who was also present on the occasion said there are 14 PSU entities that do not comply with the minimum public shareholding rule.
Corporates liberally do not meet SEBI's minimum public float norm of 25% in a listed company citing some or the other pretext. Furthermore, some of the PSBs have government holding of even up to 95% and in respect of them finance ministry is seeking some relief from the market regulator SEBI. Garg however did not state whether the deadline remains applicable for PSBs or not.
Sitharaman in Union budget 2019 announced a week before said it is right time to consider increasing minimum public shareholding in the listed companies. "I have asked SEBI to consider raising the current threshold of 25% to 35%.", she said. But the proposal was given a thumbs-down by the corporates and market, with the Sensex crashing down. Market players also inferred that the proposal of raising minimum public float could result in some of the MNCs considering delisting instead of dilute promote holding.
Nonetheless, Finance secretary made a clarification that so far there has been taken no decision on raising MPS but consultations have begun and the market regulator shall consult with all stakeholders who are against and in favour of the proposal.