New Delhi, August 3
The government is likely to put on hold a plan to raise the minimum public shareholding in listed companies, a source with direct knowledge of the matter said, amid concerns it could force the issuance of billions of dollars worth of shares.
Indian stock markets fell sharply when Finance Minister Nirmala Sitharaman announced the proposal to raise the minimum public shareholding in companies to 35% from 25% in the Budget.
“We may not notify this year the 35% minimum shareholding norm as we have got some representation on the issue and we will look into it in detail and understand the viability of such a proposal,” the source, who is dealing with the matter, said today.
The source could not be named because of the sensitivity of the matter.
The rule, if implemented, could result in companies having to offer approximately 1 trillion rupees ($15 billion) in shares currently owned by controlling shareholders to the public, analysts have said.
The government is also looking at a number of other issues such as foreign portfolio investors’ tax concerns, the source added.
