Cochin Shipyard allowed by SEBI to use ETF route for public shr norm

24 Jun 2022

Cochin Shipyard Ltd, a government-owned company, has been permitted by the Securities and Exchange Board of India to comply with the 25% minimum public shareholding requirement by way of government reducing its stake through CPSE Exchange Traded Fund issue in February 2020.

The company said in an exchange filing today that SEBI has given a one-time relaxation on the sale of shares by the government, as a method to comply with the minimum public shareholding norm.

After a buyback of shares by Cochin Shipyard in October 2018, the public shareholding had fallen to 24.79%.

Following the CPSE ETF tranche of February 2020, the company’s promoter holding went up to 27.14%. But since the method was not a part of the approved methods of meeting the 25% minimum public shareholding norm SEBI had directed the company to comply by December 2020.

Subsequently, the company said, the government requested SEBI to allow disinvestment through the ETF route as one of the methods for achieving the compliance with the minimum public shareholding rule.