The Securities and Exchange Board of India (SEBI) has granted a reprieve to companies from complying with the 25 percent minimum public shareholding (MPS) norms.
In a circular on Thursday, the market regulator said: “It has been decided to grant relaxation from the applicability of the October 10, 2017 circular for listed entities for whom the deadline to comply with MPS requirements falls between March 1, 2020, and August 31, 2020.”
The circular issued in the month of October lays down the procedure to be followed by stock exchanges to MPS non-compliant companies, their promoters, and directors. The penal action includes fines and freezing of excess promoter holding.
The companies through investment bankers and industry bodies had approached the regulator seeking relaxation citing unfavorable market conditions to conduct share sales. Consequently, in furtherance of such representation, the board eased the action on non-compliance of companies with MPS requirements.
SEBI’s relaxation would also benefit companies where promoter holding had increased beyond 75 percent because of open offers or other acquisitions.
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