Listed Company required to maintain at least 5% of Public Shareholding as a Result of Implementation of Resolution Plan: Govt. [Read Notification]

The Department of Finance notified that the Listed company required to maintain at least 5% of public shareholding as a result of the implementation of the resolution plan.

The government notified the Securities Contracts (Regulation) (Amendment) Rules, 2021 which seeks to amend the Securities Contracts (Regulation) Rules, 1957.

In the Securities Contracts (Regulation) Rules, 1957, in rule 19, in sub-rule (2), in clause (b), in sub-clause (iii), after the words “four thousand crore rupees”, the words  “but less than or equal to one lakh crore rupees” shall be inserted.

In other words, At least ten per cent of each class or kind of equity shares or debentures convertible into equity shares issued by the company was offered and allotted to public in terms of an offer document if the post issue capital of the company calculated at offer price is more than four thousand crore rupees but less than or equal to one lakh crore rupees.

In rule 19, in sub-rule (2), in clause (b) after sub-clause (iii) and before the provisos, the following shall be inserted, namely “(iv) at least such percentage of each class or kind of equity shares or debentures convertible into equity shares issued by the company equivalent to the value of five thousand crore rupees and at least five per cent of each such class or kind of equity shares or debenture convertible into equity shares issued by the company, if the post issue capital of the company calculated at offer price is above one lakh crore rupees; Provided that the company referred to in this sub-clause (iv) shall increase its public shareholding to at least ten per cent within a period of two years and at least twenty-five per cent. within a period of five years, from the date of listing of the securities, in the manner specified by the Securities and Exchange Board of India.”

In rule 19A, in sub-rule (5), in the proviso, for the word “eighteen”, the word “twelve” shall be substituted and the proviso shall be inserted, namely, “Provided further that, every listed company shall maintain public shareholding of at least five per cent. as a result of implementation of the resolution plan approved under section 31 of the Insolvency and Bankruptcy Code, 2016.”

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