AB Capital to sell 5% stake in Aditya Birla Sun Life via OFS to comply with norms

"The Asset Monetisation Committee of the Board of Aditya Birla Capital approved the sale of shares up to 1,43,88,662 equity shares of representing 4.99% of the issued and paid-up equity share capital by way of an offer for sale," AB Capital said in a filing.

The minimum public shareholding rule mandates all listed companies to ensure that at least 25% of their equity shares are held by non-promoters.

A high promoter holding can lead to an artificial mismatch between demand and supply as fewer shares are available for the public to buy and sell.

Sebi rules, therefore, mandate all listed companies to have a minimum 25% public float but with some exceptions. PSU banks, for example, have been given time till August 2024 to meet the norms.

Promoters of listed companies can offload the additional stake through OFS, rights issue, bonus issue to public shareholders, or even via qualified institutional placement route to comply with the minimum holding rule.

Sebi had earlier asked the exchanges to monitor methods adopted by listed entities to increase their public holding and comply with the norms and any non-compliance observed by the bourse would be reported to the regulator quarterly.

Currently, is majority-held by promoters with an 86.47% stake, while the rest is owned by public shareholders. Among the promoter group, AB Capital holds around 49.99% stake in AB Sun Life.

AB Sun Life AMC is the investment manager of AB Sun Life MF, a registered trust under the Indian Trusts Act. AB Sun Life AMC also operates multiple alternate strategies, including portfolio management services, real estate investments, and alternative investment funds (AIFs).

It is one of the leading asset managers in India, servicing around 7.98 million investor folios with a total AUM of Rs 3.24 lakh crore as of December 31, 2023.

On Monday, AB Sun Life AMC shares closed 1.28% lower at Rs 472.70 on the NSE.