PSEs Spared the Public Share Holding Burden

Considering the comfort of Public Sector Entitites, the Indian Finance Ministry on 9 August 2010 diluted minimum public shareholding' guidelines. As per the revised guidelines, listed public sector entities would be required to keep 10% public share holding as against 25% suggested earlier. The public sector entities would have to reach the 25% public sector holding limit in three years time. Also the government removed the requirement for the public sector entity to issue at least 5 per cent equity every year for meeting the minimum public float norms. With the minimum public shareholding for PSUs being brought down to 10 per cent over three years the number and amount of FPOs that would hit the market from the PSU space would be lessened. After the recent amendment in the guidelines 15 PSUs would be subjected to the requirement of FPOs as against the earlier estimated 35.