Friday, July 13, 2012

Promoters to dilute stake - SEBI announces new share auction mechanism

The Securities and Exchange Board of India (SEBI), has made it easier for promoters of listed
companies to dilute their stake and comply with public holding rules by next year. Private sector companies as well as state-owned corporations must have a minimum public holding of 25% by August 2013. Till now, this could have been achieved through follow-on public offerings and institutional placement of stocks. The Securities & Exchange board of India (SEBI) board, announced a simpler share auction mechanism that would help listed companies to attract investors. The regulator has provided institutional investors with the option of applying for shares either with 100% margin or with a lesser margin to be fixed by stock exchanges. But in the latter case, the bids cannot be changed.

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