Sebi allows govt room to lure retail investors





20% Share For Retail Players In Divestment Issues | No Immediate Change In FPO Norms

The Securities & Exchange Board of India (Sebi) has decided against giving any immediate relief to the government to boost its share sales through follow-on public offers (FPOs), even as it has provided some flexibility in offer-for-sale (OFS) on stock exchanges to boost retail investor participation in the disinvestment programme.

The government has decided to double the share of OFS reserved for retail investors to 20%, using the flexibility available in Sebi rules that allow issuers to raise the floor beyond 10%. It has also decided to give an additional day to announce the OFS against the current stipulation that the issue can only be announced a day before the auction on the stock exchanges. The finance ministry had argued that the move will help generate more awareness about the issue among retail investors and get them to invest.

In case of FPOs, however, Sebi is of the view that the process of easing the rules will take at least six months, a move that will not help a majority of the government disinvestment programme and only a handful of share sales in March will benefit. "Sebi needs to follow a process that requires consultation and decision by its board.That may take a while," said a source privy to the discussions between the regulator and the North Block.

The finance ministry has lined up 10-odd share sales, including by blue chips such as ONGC, Coal India and Bhel, to raise over Rs 43,000 crore from them. The NDA government is keen that instead of allowing institutional investors, both domestic and foreign, walk away with the shares, a larger share of the pie should be shared with retail investors, prompting the government to seek a change in rules.