Market regulator Securities and Exchange Board of India (SEBI) on Tuesday cleared the government proposal to buy 55.57% stake in Industrial Finance Corporation of India (IFCI), without triggering an open offer for shares of public investors, but through conversion of debentures.
The Union Cabinet, on August 24, approved a proposal for conversion of debentures worth Rs 923 crore into shares of IFCI, following which the government's stake in the financial institution would raise to a major 55.57% from a meager 0.0000011% currently.
Further, on August 29, the Finance Ministry filed an application with SEBI, seeking exemption from complying with the open offer requirements stipulated under the takeover code. As per SEBI's takeover norms, any stake purchase of 25% or more requires the acquirer to make an open offer for a further 26% stake from the public shareholders.
Meanwhile, IFCI which is into funding of industrial projects, although has no single identifiable promoters but its single largest shareholder is Life Insurance Corporation.
