Though SEBI had issued a circular last fiscal on the minimum public holding that a listed company must have, there is no time frame fixed in meeting the norm.
Accordingly, SEBI had restricted promoters having more than 55 per cent stake to acquire up to 2 per cent of company shares every year without taking its permission, instead of the previous limit of 5 per cent.
"SEBI is now reviewing the guideline. A time frame will be spelt out for listed companies," a senior SEBI official 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.
However, a problem crops up when a company has to make mandatory open offer to buy 20 per cent shares from the public after they acquire 55 per cent stake in the company.
Suppose a company goes for an open offer and acquires equity beyond 75 per cent, then it can have difficulty as 25 per cent of the shares will not remain with the public.
To ensure that companies adhere to the norms, the creeping acquisition limit was capped at 2 per cent annually after promoter's holding crosses 55 per cent in the company.
Market sources said there is still a confusion over the definition of "promoters" and there are lot of interpretation going around in the market.
So it is necessary for SEBI to look at the definition of the promoters and the group of controlling shareholders, sources said adding the definition may be revised as well.
SEBI is aware of the problems of some of the companies in meeting the norms. However, the market regulator wants to give them "sufficient time" to be able to reduce their holding below 75 per cent.
