According to persons familiar with the development, the government wanted to reserve some shares for employees in the recently-concluded OFS of NMDC, but could not do so as the OFS guidelines have no such provision.
The issue came up during NMDC's OFS and it was suggested to the ministry of divestment that employees can be allotted shares through spot contracts or even preferential allotment after a stake sale, said a person privy to the matter. The issue was taken up by Sebi and we believe that the regulator is not averse to such an idea, he added.
Sources said while Sebi is not keen on allowing a reserved portion for employees within OFS, it has instead suggested to the government that PSUs can allot shares to its employees through spot contracts or even preferential allotment after the 12-week mandatory cooling period post an OFS is over.
This would be surely welcomed by the large employee community of listed PSUs as the recent stake sales have been done through the OFS mechanism, which is typically aimed at institutional investors. Incidentally, till a few years back, divestment was done through a follow-on public offer (FPO) that had a reserved portion for employees.
While the government recently diluted its stake in Hindustan Copper and NMDC, the pipeline comprises of many companies including NTPC, SAIL, BHEL, Oil India, Nalco and MMTC among others.
According to the current regulatory regime, companies can opt for OFS, IPP, FPO, rights and bonus issue to bring down the promoter holding to 75%. The regulator has, however, said that if a company wants to opt for any other avenue for diluting promoter stake, it could approach Sebi with a proposal.
Listed entities desirous of achieving the minimum public shareholding requirement through other means may approach Sebi with appropriate details... Such requests would be considered by Sebi based on merit, stated a Sebi circular issued in August.
According to the minimum public shareholding norms, promoters of all listed private entities have to bring down their stake to 75% by June 2013. The deadline for public sector companies has been fixed at August 2013.