[1]Criticising the government and corporate houses for over-pricing public issues, Mr Deepak Parekh, who heads a key Sebi committee, said all listed companies should increase the stake in the public to 25 per cent within a year to help tackle this issue.
Elaborating, Mr Parekh, who is also the chairman of HDFC, said: “Our issuers (entities coming out with public offers) don’t want to leave money on the table. They want to maximise the price. You need to have a heart to give money and let others make money.”
On the government’s failure to evoke a good response to its public issues to divest stake in different PSUs, he said: “(Even) the government does not want to leave money on the table... it wants to avert criticism that it gave it (PSU shares) too cheaply.”
Asked about the 25 per cent mandatory public holding in listed companies, an issue on which differences have surfaced between the government and Sebi, he said that it should be done within a year.
The finance ministry had in 2008 proposed raising public exposure in listed companies to a minimum 25 per cent to cut risk of share price manipulation.
At present, most companies dilute just 10 per cent stake and the shares tend to trade at a premium. “I will push for 25 per cent if necessary,” Mr Parekh said, adding that such a situation would help more shares in investors’ hand.
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