» US$ 39 bn to be mopped up in stake sale

» US$ 39 bn to be mopped up in stake sale
Remember the government's plan of bringing the public shareholding in all listed companies to a minimum of 25%? Well, as per Bloomberg, this could lead to as much as Rs 1.9 trillion (US$ 39 bn) in stock sales by controlling shareholders, almost five times more than the average amount companies in India have raised through IPOs over the past few years. Obviously, the selling will have to be done in a phased manner since the markets may not able to absorb the sale of such a magnitude over a short period of time.

As per reports, the average public float in Indian listed companies is less than 15% currently, making them vulnerable to manipulation, scams and abuse by majority shareholders. Hence, raising the limit to 25% will not only reduce the odds of an abuse considerably it will also bring Indian regulations at par with markets like the US, UK and Hong Kong. Incidentally, the top 10 companies that may have to sell stakes are the PSUs accounting for a significant 80% of the total value to be offloaded. Currently, the proposal is in the process of seeking public comment on a government website with the Government planning to take up the issue after completing 100 days in office.