Government Exempts PSUs From Minimum Public Float Rules

The government has exempted public sector entities from the Minimum Public Shareholding norm which mandates at least 25% public float for all listed companies.

The exemption would apply on these entities regardless of the government's direct or indirect holding.

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

The notification exempts "any listed entity in which the Central Government or State Government or public sector company, either individually or in any combination with other, hold directly or indirectly, majority of the shares or voting rights or control of such listed entity, from any or all of the provisions of this rule (MPS norms)."

The Securities Contracts (Regulation) Amendment Rules, 2022 was notified by the government on January 2.

Following the notification, IDBI Bank will be exempt from MPS even after partial stake sale by LIC and the government.

Last month, the government extended the deadline to submit preliminary bids for the lender till January 7.

The government and LIC together are looking to sell 60.72% of IDBI Bank and had invited bids from potential buyers in October. The last date for submitting expression of interest or preliminary bids was December 16.

The government and Life Insurance Corporation hold 94.71% stake in IDBI Bank.

The successful bidder will have to make an open offer for acquisition of 5.28% stake from public shareholders.