New Delhi, June 19: Sebi today asked all listed PSUs to ensure that public shareholding in them must be at least 25 per cent within three years. The regulator also unveiled reforms to boost the primary market as well as new norms for research analysts and employee stock option schemes.
The Securities and Exchange Board of India (Sebi) feels the government should dilute its stake in listed public sector companies over the next three years and cap it at 75 per cent, a recommendation which, if implemented, would lead to at least $10 billion worth of share sales.
A norm that says the public should hold at least 25 per cent of a company was earlier enforced for privately owned companies only. Sebi, at a board meeting today, said PSUs, including state-run banks, too, need to follow the rule.
“Sebi believes all the rules for markets should be neutral regardless of who the promoter is,” said Sebi chairman U.K. Sinha.
As many of the PSUs that are likely to see stake sales include blue-chips such as Coal India, SAIL and IDBI Bank, stock market analysts expect a lot of market excitement. “There is going to be significant domestic and foreign institutional investor interest in such offerings, said Vikram Sahny, who heads a Delhi-based securities brokerage, which invests on behalf of foreign investors.
Sebi today eased norms related to the size of an IPO and pricing of preferential shares, while allowing anchor investors to have a greater exposure to the offering.
Sebi has also approved a proposal to allow bonus shares to be sold in IPOs (initial public offers) even if they have been issued within a year. The board decided that all companies with a post-issue capital above Rs 4,000 crore were compulsorily required to offer at least a 10 per cent stake in the IPO.
In other IPOs, the minimum dilution to the public will be 25 per cent, or Rs 400 crore, whichever is lower.
Companies that dilute less than 25 per cent in an IPO will be given three years to comply with the norms.
Sebi has increased the anchor investor’s bucket to 60 per cent from the current requirement of 30 per cent of the institutional bucket.
Employee stock options
The regulator has finalised an easier set of regulations for employee stock option schemes that, among other things, would classify ESOP Trusts as a separate category of shareholding entities. Sebi has allowed companies to have employee stock option programmes where they can buy their own company shares subject to certain conditions.
Offer for sale
Retail investors will now get a 10 per cent reservation in an offer-for-sale (OFS) by listed companies and they may also be given discounts by entities selling shares through this mechanism. Besides, non-promoter shareholders with more than a 10 per cent stake can sell their shares through an OFS, according to a proposal cleared today by Sebi, which also allowed a larger set of companies to tap this route.
The regulator has cleared detailed norms to regulate research analysts. “In India, research analysts were not being regulated. Now all the people who are doing research reports will be regulated,” Sinha said. The new norms seek to register research analysts as well as those who make recommendations related to securities, public offers such as brokerage houses, merchant bankers, proxy advisers.