The government made mandatory for listed co. to raise public shareholding to 25%

The government on last Friday made it mandatory for listed companies to raise public shareholding to 25%, with at least 5% dilution a year, a move that would attract more investors and check share price manipulation.

A recent study by Crisil Equities said there are 179 listed companies that have public shareholding below 25% and the move would significantly increase liquidity in the equity markets, make fair price discovery more robust and enhance investor participation.


It estimated that about 82% of the estimated funds are likely to be raised by 29 listed government entities if they adhere to the new norms. At present, most of the IPOs come with a 10% float and certain listed PSUs have public holding even below that threshold.

Read entire Notification issued by Ministry of Finance here

Source: Live Mint

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