Mandatory 25% Free Float on Listed CompaniesKapil
The Amendment details as promised by the Finance Minister , for minimum threshold of 25%, to the public shareholding is here
The salient features of the amendment are as follows:
a)The minimum threshold level of public holding will be 25% for all listed companies.
b)Existing listed companies having less than 25% public holding have to reach theminimum 25% level by an annualadditionofnot less than 5% to public holding.
c)For new listing, if the post issue capital of the company calculated at offer price is more than Rs. 4000 crore, the company may be allowed to go public with 10% public shareholding and comply with the 25% public shareholding requirement by increasing its public shareholding by at least 5% per annum.
d)For companies whose draft offer document is pending with Securities and Exchange Board of India on or before these amendments are required to comply with 25% public shareholding requirement by increasing its public shareholding by at least 5% per annum, irrespective of the amount of post issue capital of the company calculated at offer price.
e)A company may increase its public shareholding by less than 5% in a year if such increase brings its public shareholding to the level of 25% in that year.
f)The requirement for continuous listing will be the same as the conditions for initial listing.
g)Every listed company shall maintain public shareholding of at least 25%.If the public shareholding in a listed company falls below 25% at any time, such company shall bring the public shareholding to 25% within a maximum period of 12 months from the date of such fall.
Effects of mandatory 25% free float —-