Mumbai: Markets regulator Sebi on Wednesday said various issues need to be examined before deciding on mandating 35 per cent minimum public shareholding in listed companies as many PSUs are yet to meet even the 25 per cent threshold. In the latest Union Budget, Finance Minister Nirmala Sitharaman proposed 35 per cent minimum public shareholding requirement for listed companies.
Responding to a query about the proposal for increasing the minimum public shareholding level, Sebi Chairman Ajay Tyagi said that liquidity needs to increase in terms of better price discovery, more trading and dispersed shareholding, among others.
"There are certain issues that need to be further examined. We will need to look at global regulations whether it is mandated beyond 25 per cent anywhere. What is the right level to be mandated... What will be the short term and long term implications for the companies and for the market," he told reporters after Sebi board meeting.
Right now, Tyagi said IPO market is also not doing very well.
"45 per cent of listed PSUs as of now don't even meet the 25 per cent requirement and they have been given time till August 2020 to comply with (the requirement). All these issues need examination and consideration. For the time being, I will say we will examine all those issues," he noted.
Currently, listed companies should have at least 25 per cent public shareholding.
To a query on whether consultations happened with the government over FPI surcharge announced in the Budget, Tyagi did not give a direct reply. "Inputs on various issues that are sought by the government from time to time, we have shared those with the government. But that is between us and the government," he said.
Responding to another question on the Budget proposals on FPI surcharge and an additional tax liability on buybacks, the Sebi chief said the regulator has taken up with the government for clarifications. However, it was not clear whether Tyagi was commenting on the buyback or the FPI surcharge issue.