Indian state-run firms to remain exempt from public shareholding norms -govt

Credit: REUTERS/Shailesh Andrade

By Nikunj Ohri

NEW DELHI, Jan 3 (Reuters) - Indian state-run companies will continue to be exempt from the minimum public shareholding (MPS) norm that requires listed companies to maintain a 25% public shareholding, a government notification said late on Monday.

The exemptions from the MPS norm will be valid for a "specified period" even if there is a change in ownership or control after the exemption is granted, the notification said.

The exemption from the public shareholding norm would be extended to IDBI Bank IDBI.NS, too, which is in the process of a stake sale, a government source said.

The government and Life Insurance Corp. of India LIFI.NS are collectively selling 60.72% of IDBI Bank, which is currently classified as a private lender by the country's banking regulator.

The Indian government has yet to decide on the period of exemption for the new owner of the private lender, the official said.

India's capital market regulator has been giving state-run companies exemptions from the MPS norm for years now.

Extending that exemption for the state-run firms may encourage more investors to buy stakes in government companies.

So far, the government's privatisation drive has not taken off as much as expected.

Last month, the regulator said it will relax listing obligations in cases where the federal government sells its majority stake to a private buyer.

(Reporting by Nikunj Ohri, writing by Shilpa Jamkhandikar; editing by Sudipto Ganguly, Savio D'Souza and Dhanya Ann Thoppil)

((shilpa.jamkhandikar@thomsonreuters.com;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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