The current minimum public shareholding norms states that 25 per cent of shares in a listed company have to be held by public shareholders, it said.
Currently, in about 30 per cent of listed CPSEs, Government shareholding is already below 60 per cent, limiting further disinvestment through offer for sale, as it is stipulated in the Companies Act that a ‘government company’ must have at least 51 per cent of its stake held by the central or state government., the survey noted.
Since effective control requires only about a 26 per cent stake, the Government could consider amending the definition of “Government Company” under the Companies Act, limited to listed entities, to allow them to remain as government companies with a minimum of 26 per cent ownership, thereby retaining special resolution rights, while enabling the government to monetise its stake, it suggested.
Alternatively, if the objective is eventual privatisation, the Government could continue phased offer for sale below 51 per cent and even towards full exit, without changing the legal definition of “government company”, the survey said.
This would enable CPSEs to function post-disinvestment as professionally managed entities with dispersed ownership, clear governance standards, and transparent succession frameworks, it said.
A portion of disinvestment receipts could also be earmarked for strategic investments in emerging technology and innovation-driven companies through professionally managed platforms such as the National Investment and Infrastructure Fund (NIIF), thereby recycling public capital toward future growth sectors. This will also ensure a steady stream of disinvestment receipts into the future.
