Domestic investors to get more stake in PSU selloff

Mumbai, March 23 | Updated: Mar 24 2005, 05:30am hrs
The government is planning to increase the limit on allotment to domestic investors, including retail investors, in the proposed disinvestment of public sector units (PSUs).

Government is seriously considering to increase the current reservation limit of 10 per cent to domestic investors in the proposed disinvestment of psus, company affairs minister Prem Chand Gupta told reporters here on Wednesday.

Mr Gupta, speaking on the sidelines of a conference organised by Investors Grievances Forum, said the recommendation of hiking the allotment limit is now with the Securities and Exchange Board of India (Sebi).

Contrary to transferring bulk chunk of investment of PSUs to financial institutional investors (FIIs), it is always good to have the investment remain with in country at the hands of domestic investors, he said.

Asked about the amendment of Companies Act, Mr Gupta said Irani Committee would submit its report in two months and later the government would present Bill in Parliament.

We are planning to reduce the size of companies act by one-third from its current size with 781 provisions. It will be amended to a transparent structure in a simplified manner. The new version of act will be designed in such a way even a common man can understand it easily, the minister said.

To a query, Mr Gupta cautioned about the series of initial public offerings (IPOs) hitting the capital market.

I am not concerned about the quality of IPOs. But the investors, especially small investors, should take informed decisions rather than going by general conception, he said.

PTI