Divestment dilemmas

There is little doubt that the Securities and Exchange Board of India's (SEBI) decision to create a new Institutional Placement Programme (IPP) route to enable companies meet minimum public shareholding threshold norms is timed largely at smoothening the Government's currently-stalled disinvestment drive. With a comatose market ruling out raising of money through public equity offerings, the IPP mechanism allows firms to issue fresh shares or sell existing securities directly to qualified institutional buyers (QIB) such as FIIs, banks, insurance companies and mutual funds. 

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