"We have changed the retail investor quota in the Offer for Sale (OFS) route. All future disinvestments will now have 20 per cent quota for small investors," a senior finance ministry official told PTI.
The present retail investor quota in OFS is 10 per cent, while 30 per cent is reserved for them in the Follow on Public Offer (FPO).
"The decision has been taken after consultation with Sebi. The move will increase participation of small investors in the disinvestment programme," the official added.
Under the OFS mechanism, at present a minimum of 25 per cent of the shares offered are reserved for mutual funds and insurance companies.
The government has been using the OFS route for disinvestment of PSUs.
Market regulator Sebi had in January, 2013 permitted the promoters of top 100 companies to use the auction route or OFS route to dilute stake in listed companies. It also permitted OFS in those PSUs which were to meet thei minimum 25 per cent public holding norm.