To ensure this, SEBI has tightened its norms to restrict promoters having more than 55 per cent stake in their company from acquiring up to two per cent of company shares every year without taking its permission, instead of the previous limit of five per cent.
"There was an assurance given to Parliament that every company over time must have at least 25 per cent of capital in the hands of the public. With reference to that, we modified the regulations to be implemented in a phased manner," SEBI chairman G N Bajpai said after its board meeting in New Delhi.
He said SEBI had modified the substantial acquisition and takeover norms to ensure that companies, which have public holding of less than 25 per cent, adhere to the norms in a phased manner in 2-3 years.
Companies are now required to make a mandatory open offer to buy 20 per cent shares from the public after they acquire 55 per cent stake in the company.