Companies will now have to provide more disclosures about their shareholding pattern to the stock exchanges, with the Securities and Exchange Board of India introducing some new rules in addition to the existing ones. The decision was taken at the regulator’s board meet on Wednesday.
Companies going public will now have to file shareholding details one day prior to the shares listing on the bourses. Stock exchanges will have to upload the details on their website before trading commences.
At present, the shareholding pattern of companies is mentioned in the initial public offer (IPO) document and after the shares list, the company is required to file it with the exchanges once every quarter.
With the new rule, investors will get to know about the large investors in a public issue, in case they have bought more than 1% of the equity capital.
Also, listed entities will now have to file their revised shareholding pattern with the exchanges, if there is a change of more than 2% in the paid-up share capital of the company following corporate event like restructuring or preferential allotment of shares. The change in capital structure
will have to be conveyed to the stock exchanges within 10 days from the date of such change in the capital structure.
Companies will now have to provide details of shares held by custodians, against which depository receipts have been issued, by classifying them as promoter/promoter group and non-promoter.
Legal experts say the move is aimed at removing the shortcomings in the existing rules because promoters who hold American Depository Receipts and Global Depository Receipts do not disclose these stakes even though the listing agreement does not exclude such a fact from being disclosed.
Depository receipts are securities issued to overseas investors by Indian companies with domestic shares as the underlying.
The Sebi move will also bring in transparency as there would be more clarity about the shareholding structure of the company, as it been widely believed that in some company promoters own stakes through depository receipts, and do not disclose them in their regular stock exchange filings.
