State-Run Firms To Remain Exempt From Public Shareholding Norms : Govt

A government notification stated this late on Monday. The notification said that exemptions from the MPS norm will be valid for a “specified period”, even if there is a change in ownership or control after the exemption is granted

The Indian state-run companies will continue to be exempted from the minimum public shareholding (MPS) norm. This norm requires listed companies to maintain a 25% public shareholding. A government notification stated this late on Monday.

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

It may be noted that India’s capital market regulator has been giving state-run companies exemptions from MPS norm for years now. But extending this exemption for these companies, in case they are privatised, may coax the investors to buy a stake in government companies.

Insiders opine that the government’s privatisation drive has not taken off as expected.

Last month, the regulator had said it will relax listing obligations in cases where the government sells its majority stakes to a private buyer.