Tribune News Service
New Delhi, January 3
In order to facilitate the sale of IDBI Bank, the government issued a gazette notification late on Monday night, exempting public sector undertakings (PSUs) from the Minimum Public Shareholding (MPS) norm which stipulates a minimum of 25% public float for all listed companies.
The exemption would apply on PSUs regardless of the government’s direct or indirect holding and will be valid for a “specified period” even if ownership changed hands, added the notification.
The notification exempts “any listed entity in which the Central Government or State Government or public sector company, either individually or in any combination with other, hold directly or indirectly, majority of the shares or voting rights or control of such listed entity, from any or all of the provisions of this rule (MPS norms)”.
IDBI Bank will now be exempt from MPS even after partial stake sale by the LIC and the government. The government had last month extended the deadline to submit preliminary bids for IDBI Bank till January 7.
The government and LIC together are looking to sell 60.72% of IDBI Bank and had invited bids from potential buyers in October. The last date for submitting expression of interest (EoI) or preliminary bids was December 16. The government and LIC hold 94.71% stake in IDBI Bank. The successful bidder will have to make an open offer for acquisition of 5.28% stake from public shareholders.
Exemption valid for ‘specified period’
- According to rules, listed companies are required to maintain minimum public shareholding of 25%
- The exemption would apply on these entities regardless of the government’s direct or indirect holding
- The exemption will be valid for a “specified period” even if there is a change in ownership or control after the exemption is granted
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