look news india
With an aim to facilitate access to global capital for Indian start-ups and companies in emerging and technology sectors, the Centre has reduced the minimum mandatory public shareholding limit for companies registered with the International Financial Services Centre (IFSC) from 25 per cent to 10 per cent. Gujarat's GIFT City will immediately benefit from this decision of the Centre. The Finance Ministry said in a statement that this decision will benefit Indian companies looking to go global and establish their presence in other markets.
Experts said the cut in the limit will also encourage other companies to list with IFSC, adding that a smaller float could distort share prices. Since companies consider several factors for listing, such as liquidity, pending listings, regulatory environment, etc., this amendment in the rule will definitely encourage companies (both foreign and domestic) to explore the option of listing on stock exchanges in IFSC. A smaller float will enable companies to retain control over their companies while attracting public foreign capital.
Companies will benefit from reduction in regulatory limits
The mandatory public float limit for listing in the International Financial Services Centre (IFSC) has now been reduced to 10 per cent.
Reducing the limit will also encourage other companies to get listed on IFSC
However, experts worry that small floats could lead to manipulation of share prices
A smaller float will enable companies to retain control of their companies to attract public foreign capital
