PSU staff may be able to buy more shares of cos

 Employees of state-owned firms may have the option of investing as much as they want in follow-on public offers by their companies, while in case of IPOs, the upper ceiling could go up to Rs 5 lakh, once the government gets the green signal from markets regulator Sebi.

“We have requested the regulator to relax investment ceiling for public sector employees and are hopeful of a favourable response from Sebi,” said an official source.

If Sebi agrees to the Finance Ministry’s proposal, then there will not be any investment ceiling for employees of the PSUs taking the offer for sale (OFS) route, sources said.

In case of IPO, however, the proposal is to increase the upper limit of investment from the existing Rs 2 lakh to Rs 5 lakh.

The move has been necessitated as employees’ participation has been subdued despite discounts. The best was NTPC’s OFS of 2.06 crore shares in July wherein about 85% of shares reserved for employees were subscribed.

Earlier, the highest ever employee participation was recorded during the offer of Indian Oil Corporation in May when nearly 40% of the employees participated, applying for 53.17% of the 1.2 crore shares on offer.

The favourable response from the regulator will help widen participation of employees  and meet divestment target smoothly, sources added.

The government has set a disinvestment target of Rs 56,500 crore for the current fiscal. Of this, Rs 36,000 crore is to come from minority stake sale in PSUs and Rs 20,500 crore from strategic sale.