SEB stands by 25% public holding norm

The Securities and Exchange Board of India (SEBI) Chairman U K Sinha ruled out revisiting the existing norm for 25% public holding of shares in the listed companies, including the PSUs, and said that such a step will be a retrograde one.

"There is no proposal with SEBI to review the norm directing the listed companies with bourses, including the PSUs, to float 25% of its shares for public holding," he told reporters here at a function.

"Such a move will be retrogressive and we have no intention to do so," Sinha said in reply to a question whether the market regulator has any proposal to allow the promoters to increase sharing holding in a particular company beyond 75%.

The SEBI Chairman also underscored for ushering in transparency and corporate governance in the listed companies and said that the regular has already made electronic voting mandatory for election of board members of all listed companies.

Now that the market regulator has been armed with more powers, including recovery of penalty imposed on companies for financial and governance-related irregularities since amendment of the SEBI Act by Parliament last year, we will be taking more steps to regular the market in a transparent manner which, he said, will go a long way in protection small investors and shareholders. 

Due to reforms undertaken by the SBEI over past several years, the Indian share market has been ranked seventh by the World Bank in terms of safety and protection of small shareholders, Sinha said, adding that the jump in rating is heartwarming after the country figured on 34th and 49th in 2013 and 2012 respectively.

The SEBI Chairman drew satisfaction from impressive growth of the capital market by 25 per cent last year and lauded the FIIs for pumping in a staggering $45 billion in the Indian market in the same duration, which, he said, was a record.

The FIIs invested impressively in both equity and debt which bods well for the market in future too, he said.

Sinha, who was here to preside over a function to spread awareness about funding availability to small and medium enterprises in Bihar through venture capital, said that it was time the entrepreneurs of his home state venture out to seek capital from venture funds.

"We are here with SIDBI to spread awareness among the prospective entrepreneurs of Bihar to seek out venture capitals to raise funds for their enterprise," he said, adding that besides as many as 95 such financial companies are listed on bourses - 89 with BSE and six with NSE.