Public Float
This refers to the news item Listed companies must have 25 percent public float(ET, 5th June,2010). This is an excellent move and retail investors should welcome,encourage,support and improve their own saving pattern by switching over to investment in capital market. Minimum 25 percent subscription by public will result in better and fair price discovery of the shares and bring in some order of stability in the volatility of the market.
Such a move as and when get fully implemented and complied with by all listed companies will ensure better distribution of wealth, improved liquidity in the availability of shares and also offer an opportunity for retailers to take part and contribute in the capital formation. This will also pave way to gradually move away from investment by households in gold and Jewelery. In the long run, this measure alone will prove to be a challenge for FIIS who dictate terms to our capital market. Over all this is going to improve the health of the capital markets in all respects.
Dr. T.V. Gopalakrishnan
(This appeared in ET Dt 7th June 2010)
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