One of the big-bang proposals in the Union Budget
was for the SEBI to consider increasing minimum public shareholding
requirement in listed companies to 35 per cent...
On July 5, 2019, the Indian finance minister, in her debut
budget speech, announced a few big-bang proposals. One such
proposal was for capital market regulator Securities and Exchange
Board of India ("SEBI"), to consider
increasing minimum public shareholding requirement in listed
companies from the current threshold of 25% to 35%.
The Current Threshold
Many Indian listed companies are promoter-owned and controlled
(promoters are generally controlling shareholders in a company).
For an initial public offering to be successful and for continuous
listing, the Securities Contracts (Regulation) Rules, 1957, as
amended ("SCRR"), includes the concept
of a minimum public float (public is defined to exclude promoters
and the promoter group).
