Government likely to cap stake sale in one tranche
The government is considering to cap the amount of stake that a public sector undertaking (PSU) can sell at one time, so that it will help gather more money from disinvestment in state owned companies. It is likely to come up with 10% cap in case the move goes ahead meaning that even if there is a scope of 20% stake sale in a government-owned company, not more than 10% disinvestment would be done in one go.
Moreover, government thinks that such a strategy would help it to get superior value from disinvestment since it would perk up the price discovery mechanism and will also make sure that there is sufficient liquidity and craving in the market together with being in line with the government’’s overall approach of initiating reforms but with measured cautions.
Additionally, the government is also planning to make it obligatory for all listed companies to have a minimum public float of 25%, opening the door for disinvesting stake in a large number of PSUs.
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