The Ministry of Finance, by a Notification dated June 18, 2021, has introduced certain amendments dealing with public shareholding norms to the Securities Contracts (Regulation) Rules, 2021. Set out below are the key amendments:

i.     Where the post issue capital calculated at the offer price is above ₹ 1 lakh crore (approx. US$ 13.5 billion), the minimum public float should be at least such percentage of each class or kind of equity shares or convertible debentures (‘Offered Securities’) equivalent to ₹ 5,000 crore (approx. US$ 675 million) and at least 5% of the Offered Securities. Such companies will be required to increase their public shareholding to at least 10% within two years and at least 25% within five years. This is a relaxation from the previous requirement where for all issues above ₹ 4,000 crore (approx. US$ 540 million), the minimum public float was required to be 10%.

ii.   The time period available to a listed entity to increase its public shareholding to at least 10%, where such shareholding has fallen below 10% as a result of the implementation of a resolution plan approved under the Insolvency and Bankruptcy Code, 2016 (‘IBC’), has been reduced from 18 months to 12 months from the date of such fall. It has further been provided that every listed company is required to maintain a public shareholding of at least 5% as a result of implementation of the resolution plan approved under IBC.