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Sebi relaxes 25% minimum public shareholding norms, deadline postponed

Sebi relaxes 25% minimum public shareholding norms, deadline postponed

The Securities and Exchange Board of India (Sebi) has granted reprieve to companies from complying with the 25 per cent minimum public shareholding (MPS) norms. In a circular on Thursday, the market regulator said: “It has been decided to grant relaxation from the applicability of the October 10, 2017 circular…for listed entities for whom the deadline to comply with MPS requirements falls between March 1, 2020 and August 31, 2020.”

The October circular lays down the procedure to be followed by stock exchanges with to MPS non-compliant companies, their promoters and directors. The penal action includes fines and freezing of excess promoter holding. According to sources, companies through investment banker and industry bodies had approached the regulator seeking relaxation citing unfavorable market conditions to conduct share sales.
Experts said Sebi’s relaxation would also benefit companies where promoter holding had increased beyond 75 per cent because of open offers or other acquisitions.

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