Indian investors may be able to buy more shares in PSU selloffs

Mumbai, March 23 | Updated: Mar 24 2005, 06:22am hrs
The Centre is planning to raise the allotment limit to domestic investors, including retail investors, in the proposed disinvestment of public sector units (PSUs), said Prem Chand Gupta, minister of company affairs. He added that his ministry was working on valuations of PSUs as past valuations of PSUs have been low.

The Centre is seriously considering an increase in the current reservation limit of 10% to domestic investors in the proposed disinvestment of PSUs. The wealth of PSUs should be shared with Indians. If small investors are given a preference during PSU IPOs or disinvestment, then the shares will remain in the country itself, he noted, adding: Why should the FIIs gain

Mr Gupta was speaking on the sidelines of the 3rd National Conference of Small Investors and Investors Associations. He pointed out that he is open to the idea of rating IPOs that have flooded the markets. I am not concerned about the quality of IPOs hitting the market. The bigger concern is educating the investor and making him more aware, he stated.

Asked about amendments to the Companies Act, Mr Gupta said that the Irani Committee would submit its report in two months and later the Centre would present the bill in Parliament. The Company Act, 1956, will be vastly simplified in the coming months with a number of provisions reduced to one-third from the present 786. The new version will be designed in such a way that even the common man can understand it easily, he said.

Dr Kirit Somaiya, president, Investors Grievances Forum, handed over a charter of demands to Mr Gupta on behalf of all investors associations.