Indian state-run companies to remain exempt from public shareholding norms

STATE-RUN companies in India will continue to be exempted from the minimum public shareholding (MPS) norm that requires listed companies to maintain a 25 per cent public shareholding, the government said late on Monday (Jan 2).

The exemption will be valid for a “specified period”, even if there is a change in ownership or control after the exemption is granted, it added.

The Indian government’s privatisation drive has not taken off as much as expected. Extending the exemption to state-run companies may encourage more investors to buy stakes in government companies.

A government source said that the exemption will also be extended to IDBI Bank, which is currently classified as a private lender by the country’s banking regulator. The bank is in the process of a stake sale, with the government and the Life Insurance Corporation of India, which together own about 95 per cent of the bank, collectively selling a 60.7 per cent stake.

The source added that the government has yet to decide on the period of exemption for the private lender’s new owner.

Last month, the regulator said it would relax listing obligations in cases where the federal government sells its majority stake to a private buyer. REUTERS