Market regulator Sebi's proposal is part of efforts to strengthen corporate governance and curb misdoings at the management level.
The proposal to make it mandatory for listed companies to get shareholder approval for divestment in key subsidiaries also comes in the backdrop of ownership of subsidiaries being transferred to controlling stakeholders without keeping others in the loop.
Under existing rules, divestment in major subsidiaries does not require the approval of shareholders.
The Securities and Exchange Board of India (Sebi) has recommended that all listed companies should have a policy to determine material subsidiaries and they should be disclosed to the stock exchanges.
The Primary Market Advisory Committee (PMAC) is also of of the view that a special resolution should be moved to get shareholders' nod.
A subsidiary shall be considered "material" if the investment of the company in the unit exceeds 20 per cent of its consolidated net worth as per the audited balance sheet of the previous financial year.
The classification would also be applicable if the subsidiary generated 20 per cent of the consolidated income of the company during the previous financial year.
The requirement is expected to be part of Sebi's new set of corporate governance norms for listed companies that would come into effect from October 1.
In their suggestions on the matter, various stakeholders had said that major subsidiaries should be defined and should include Indian, foreign and step-down units.
Besides, it was suggested that certain minimum amount of information about proposed disinvestment in subsidiaries, including financial details for the past three years, the consideration as well as reasons, should be disclosed in the notice for the meeting to seek shareholder approval for the resolution.
However, there were opinions against the proposal, saying the requirement would be onerous.