SEBI (Securities and Exchange Board of India) has exempted all state-run firms from meeting public shareholding norms for two years until August 2026. This exemption means that listed public sector companies are not required to maintain the minimum 25% public shareholding mandated by the market regulator, SEBI (Securities and Exchange Board of India).
The exemption is valid for two years, ending in August 2026. This exemption applies to all listed public sector companies in India. The current rule mandated by the Securities and Exchange Board of India (SEBI) requires all listed companies to maintain a minimum public shareholding of 25%. SEBI, the market regulator, is responsible for implementing this change in its regulations.
Potential Reasons for the Exemption:
While the official document doesn’t explicitly state the reasons, there are a few possibilities:
Strategic Disinvestment: The government may be planning strategic disinvestment in some public sector companies. Relaxing the MPS requirement could make it easier to sell stakes in these companies.
Market Conditions: The current market conditions may not be favorable for some state-run firms to dilute their government holdings and achieve the 25% public shareholding. The exemption provides them with a temporary reprieve.
Implications:
Impact on Investors: This decision could potentially influence investor sentiment, as it might limit the availability of shares in some public sector companies.
Government’s Stake: The government’s stake in some public sector companies could temporarily increase due to this exemption.