Nirmala Sitharaman, India's finance minister, gestures as she speaks during a news conference in New Delhi, India, July 5 2019. Picture: T NARAYAN/BLOOMBERG
Expectations of large number of shares being sold could provide a supply overhang for the market and undermine share prices. “If it is made applicable to existing listed companies, we estimate that this will perhaps impact close to 20% of all listed companies,” said Vivek Gupta, partner and national head of mergers and acquisitions and private equity taxation at accountants KPMG in India. “That will need substantial capital, which may not be readily available,” he said.
The controlling shareholders would be concerned about diluting their shareholding and, therefore, their controlling rights, said Moin Ladha, partner at law firm Khaitan & Co.