Impact of budget on stock market

New announcement in budget regarding promoters holding their shares can create an impact in Indian Stock Market

Recently it was announced that promoters of a firm can hold only 65% with a previous limit from 75%

In other words, public stake has been made to increase from 25% to 35%

Following are the points for a firm to show it's strength.

  1. A good promoter percentage holding makes a firm to become unique among it peers
  2. A firm always tries to increase it's stake to bring trust among the public

SEBI

  • If SEBI, tries to implement this then 1174 listed companies will have to reduce their stake.
  • Above shown is the top promoter holding companies
  • Another question arises is that, if all companies tries to reduce their promoters stake then how that much amount of money can be expected from public?
  • Even company employees will buy only fewer percentage of stake if given for discounted rates
  • It can be followed immediately by government, but time period that each Company gets is what matters here
  • Even biggest champ LIC though with full reserves can't afford these huge stakes that too from different top firms
  • If this is done Immediately then it can impact the price of the stock and stocks can be solden for discounted rates
  • But this will help government to make more money with the help of central government stocks in the form of disinvestment.

Eventhough all are top listed companies with large caps, money to buy these 10% plays a vital role

I hope that some other alternate way SEBI will find to make this or time period should be given for these companies to make implementation.

Thanks
Sudharsun

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