Govt Revises Public Shareholding Rules: New Rules for Companies Under Securities Contracts (Regulation) Amendment, 2026 [Read Order]
The reform mandates gradual increases to 25% public ownership within 3–10 years, ensuring broader investor participation and stronger corporate governance.
![Govt Revises Public Shareholding Rules: New Rules for Companies Under Securities Contracts (Regulation) Amendment, 2026 [Read Order]](https://images.taxscan.in/h-upload/2026/03/14/2129272-new-rules-companies-under-securities-contracts-taxscan.webp "Govt Revises Public Shareholding Rules: New Rules for Companies Under Securities Contracts (Regulation) Amendment, 2026 [Read Order]")
The Finance Ministry’s March 13, 2026 Gazette amended Rule 19(2)(b) of theSecurities Contracts (Regulation) Rules, 1957, introducing tiered public shareholding norms based on company size. For decades, the Gazette of India had chronicled amendments to the Securities Contracts (Regulation) Rules, 1957 by 2026, the stakes were higher. Companies were raising capital in the tens...
The Finance Ministry’s March 13, 2026 Gazette amended Rule 19(2)(b) of theSecurities Contracts (Regulation) Rules, 1957, introducing tiered public shareholding norms based on company size.
For decades, the Gazette of India had chronicled amendments to the Securities Contracts (Regulation) Rules, 1957 by 2026, the stakes were higher. Companies were raising capital in the tens of thousands of crores, and regulators faced a pressing challenge: how to balance promoter control with public participation.
The new rules introduced a tiered framework:
- Smaller firms (capital up to ₹1,600 crore) must offer 25% of shares to the public.
- Mid-sized companies had to meet absolute thresholds — ₹400 crore, ₹1,000 crore — ensuring meaningful access.
- Large corporations (above ₹1 lakh crore) could start with smaller percentages, but were required to raise public shareholding to 25% within 5–10 years.
- Even the largest firms (above ₹5 lakh crore) had to list at least 1% of shares worth ₹15,000 crore, with gradual increases over time.
Additional provisions:
- At least 2.5% of each class of shares must be offered at listing.
- Companies with superior voting rights shares must list them alongside ordinary shares.
- Stock exchanges can impose penalties for past non-compliance.
The notification also addressed superior voting rights shares, mandating that promoters list them alongside ordinary shares to ensure transparency. Stock exchanges were empowered to impose penalties for past non-compliance, and companies listing in International Financial Service Centres (IFSCs) were given a slightly lower threshold of 10% public shareholding.
The notification was formally issued under the authority of Alok Tiwari, Joint Secretary (Financial Markets), underscoring its weight as a cornerstone in India’s financial regulatory journey.
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