Alteration of Share Capital in Order to Meet the Minimum Public Holding Requirement - An Analysis

XI Capital Markets Conference, 21-22 December 2012, Indian Institute of Capital Markets (UTIICM)

15 Pages Posted: 2 May 2013

See all articles by Maanas Vibhu

Maanas Vibhu

National Law University, Delhi

Kavitha Ananth

National Law University, Delhi

Date Written: December 21, 2012

Abstract

Initially, the Securities Contracts (Regulation) Act (“SCRA”) Rules 1957, required public listed companies to comply with certain minimum public shareholding requirements. However, this was subject to the discretionary power of SEBI to waive or modify this criterion – thereby rendering these requirements hardly stringent.

On 4 June 2010, the Government amended the SCRA Rules and ordered all public listed companies to ensure a minimum of 25 per cent public shareholding, setting June 2013 as the deadline for all private sector companies and August 2013 for all public sector undertakings to meet these norms.

Various methods including Offer for Sale and Institutional Placement Programmes have been listed by SEBI to facilitate the mandated change. The question then is – can all these methods be availed of by all companies and be of benefit to them, irrespective of their financial position? Are all of them scrutinized to the same extent?

This paper seeks to compare SEBI’s methods to those offered by foreign regulatory agencies thereby analysing the most viable means through which these companies can achieve the minimum public shareholding.

Keywords: SCRA Rules

Suggested Citation

Vibhu, Maanas and Ananth, Kavitha, Alteration of Share Capital in Order to Meet the Minimum Public Holding Requirement - An Analysis (December 21, 2012). XI Capital Markets Conference, 21-22 December 2012, Indian Institute of Capital Markets (UTIICM) . Available at SSRN: https://ssrn.com/abstract=2258269 or http://dx.doi.org/10.2139/ssrn.2258269

Maanas Vibhu (Contact Author)

National Law University, Delhi ( email )

Sector- 14, Dwarka
Dwarka
New Delhi, Delhi 110078
India

Kavitha Ananth

National Law University, Delhi ( email )

Sector- 14, Dwarka
Dwarka
New Delhi, Delhi 110078
India

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