{"id":344793,"date":"2025-08-20T16:51:10","date_gmt":"2025-08-20T11:21:10","guid":{"rendered":"https:\/\/forumias.com\/blog\/?p=344793"},"modified":"2025-08-20T16:51:10","modified_gmt":"2025-08-20T11:21:10","slug":"minimum-public-shareholding","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/minimum-public-shareholding\/","title":{"rendered":"Minimum Public Shareholding"},"content":{"rendered":"<p><strong>News:<\/strong> The Securities and Exchange Board of India (SEBI) has proposed significant changes to the Minimum Public Shareholding (MPS) and Minimum Public Offer (MPO) regulations for large companies aiming to list on Indian stock exchanges.<\/p>\n<h2><strong>About Minimum Public Shareholding<\/strong><\/h2>\n<ul>\n<li>The <strong>Minimum Public Shareholding (MPS)<\/strong> rule is a regulatory requirement established by the <strong>Securities and Exchange Board of India (SEBI)<\/strong>, under the <strong>Securities Contracts (Regulation) Rules, 1957<\/strong>, and is further reinforced by the <strong>SEBI (Listing Obligations and Disclosure Requirements) Regulations<\/strong>. These rules are applicable to all listed companies in India.<\/li>\n<li><strong>Objectives of MPS: <\/strong>The primary objectives of the MPS rule are:\n<ul>\n<li>To <strong>enhance liquidity<\/strong> in the stock market by increasing the number of publicly traded shares.<\/li>\n<li>To <strong>promote fair price discovery<\/strong>, as a wider pool of shareholders results in better market efficiency.<\/li>\n<li>To <strong>strengthen corporate governance<\/strong> by ensuring that the company is not dominated by a small group of promoters.<\/li>\n<li>To encourage <strong>broader participation<\/strong> from retail investors and institutional shareholders.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Applicability:<\/strong> The MPS rule applies to all listed companies in India, irrespective of their size or sector. Both <strong>existing listed companies<\/strong> and <strong>newly listed companies<\/strong> must adhere to these requirements.<\/li>\n<li><strong>Requirement:<\/strong> Under the MPS rule, all listed companies must ensure that at least <strong>25% of their total issued and paid-up equity share capital<\/strong> is held by <strong>public shareholders<\/strong>, which include non-promoter and non-promoter group entities. This ensures that the public holds a significant portion of the company&#8217;s shares, contributing to market liquidity.<\/li>\n<li>If the promoters of a company hold <strong>more than 75% of the equity share capital<\/strong>, they are required to <strong>reduce their stake<\/strong> to comply with the MPS rule. This divestment can be done by either placing shares with institutional investors or issuing rights shares to the public. The aim is to ensure that the public shareholding reaches the minimum required level.<\/li>\n<li>For <strong>newly listed companies<\/strong>, the MPS rule mandates that they meet the <strong>25% public shareholding requirement<\/strong> within <strong>three years<\/strong> from the date of listing.<br \/>\nFor companies with a <strong>post-issue market capitalization<\/strong> of over <strong>\u20b91 trillion<\/strong>, the deadline to meet the 25% public shareholding requirement is extended to <strong>five years<\/strong>.<\/li>\n<li>If at any point a company&#8217;s public shareholding falls below the required <strong>25%<\/strong>, the company must restore it to 25% within a maximum period of <strong>12 months<\/strong>. Failure to meet this requirement could lead to penalties or other regulatory actions.<\/li>\n<li>If a company fails to comply with the MPS requirement, <strong>SEBI<\/strong> may impose <strong>penalties<\/strong> or take corrective action. Additionally, the company could face <strong>restrictions on corporate actions<\/strong>, such as mergers, buybacks, or rights issues. Stock exchanges may also take <strong>disciplinary measures<\/strong>, which could include fines or the suspension of the company&#8217;s shares from trading.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>News: The Securities and Exchange Board of India (SEBI) has proposed significant changes to the Minimum Public Shareholding (MPS) and Minimum Public Offer (MPO) regulations for large companies aiming to list on Indian stock exchanges. About Minimum Public Shareholding The Minimum Public Shareholding (MPS) rule is a regulatory requirement established by the Securities and Exchange&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/minimum-public-shareholding\/\">Continue reading <span class=\"screen-reader-text\">Minimum Public Shareholding<\/span><\/a><\/p>\n","protected":false},"author":10366,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1566,3127,12039],"tags":[11872,10498],"class_list":["post-344793","post","type-post","status-publish","format-standard","hentry","category-daily-factly-articles","category-economy","category-knolls","tag-9pm-daily-factly","tag-the-hindu","entry"],"jetpack_featured_media_url":"","views":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/344793","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10366"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=344793"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/344793\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=344793"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=344793"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=344793"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}