Budget 2019 proposal raises question of Rs. 4 lakh crore
There were very few announcements in this budget that were directly relating to the equity market, however, one that really raised the concern was pushing SEBI to consider raising the minimum public shareholding in the listed companies from the current threshold of 25 per cent to 35 per cent.
At the current juncture, if we take only BSE listed companies it will mean around 1,200 companies together raising Rs. 4 lakh crore. Out of this, TCS alone will have to divest its 7 per cent of promoter’s stake, which at current equity structure would mean it would have to raise Rs. 59,326 crore. Against the common perception that MNC as a category will get impacted the most, it is Indian companies that rank top 8 out of the top 10 companies in terms of quantum that need to be divested.
Top 10 Companies in terms of divestment
| Company Name | Total of Promoter and Promoter Group (%) | Latest Equity (Rs Cr) | Latest Market Cap (Rs Cr) | Latest Price (Rs) | Sector | House | Total Amt. to be Raised |
| Tata Consultancy Services | 72.05 | 375.24 | 841509.79 | 2242.60 | IT | Tata | 59,326 |
| Wipro | 73.85 | 1207.07 | 171283.50 | 283.80 | IT | WIPRO | 15,159 |
| Avenue Supermarts | 81.20 | 624.08 | 89459.39 | 1433.45 | Retailing | Private | 14,492 |
| Bandhan Bank | 82.26 | 1193.10 | 66735.82 | 559.35 | Bank | MNC | 11,519 |
| HDFC Life Insurance Co Ltd | 76.14 | 2017.49 | 98685.48 | 489.15 | Insurance | HDFC | 10,994 |
| IDBI Bank | 97.46 | 7736.29 | 29127.15 | 37.65 | Bank | PSU | 9,455 |
| Coal India | 70.96 | 6162.73 | 154807.74 | 251.20 | Mining | PSU | 9,227 |
| Hindustan Unilever | 67.19 | 216.48 | 387975.64 | 1792.20 | FMCG | Hindustan Unilever - MNC | 8,497 |
| General Insurance Corporation of India | 85.78 | 877.20 | 40298.57 | 229.70 | Insurance | PSU | 8,374 |
| HDFC Asset Management Company | 82.72 | 106.30 | 42769.39 | 2011.80 | Finance | HDFC | 7,579 |
In terms of houses, looking at which house will have to shed their promoter holding the most, it is the President of India. PSU as a sector needs to divest the most.
| House | Sum of Total Amt. Raised |
| PSU | 1,17,753.38 |
| Tata | 61,512.33 |
| MNC | 55,981.00 |
| Private | 48,792.69 |
| HDFC | 18,572.30 |
| WIPRO | 15,158.59 |
| Adani | 10,311.60 |
| ICICI | 6,657.91 |
| L&T | 5,266.32 |
source:ACE Equity
Details are yet of be out on how and when this will be implemented, however, once it is out it forms mere 3 per cent of the current market-cap of BSE listed companies. This move from the government's perspective can help to increase its revenue as LTCG will be applicable on promoter's who divest their share.