"All companies to have 25 per cent minimum public shareholding by August 2020," Garg said at an event on the Union Budget organised by the Confederation of Indian Industry (CII).
DIPAM Secretary Atanu Bhattacharya, who was also present at the event, said that 14 PSU companies do not meet the minimum public shareholding norm.
While as per market regulator Sebi's norm, the minimum public float has to be 25 per cent in a listed company, it is flouted liberally by many firms and corporates fail to comply with it under some pretext or the other.
In case of PSU banks, many such banks have government ownership of even to the extent of 95 per cent and the Finance Ministry is seeking relaxation for them from Sebi. But Garg did not explicitly say whether this deadline will be applicable to the public sector banks (PSBs) as well.
The deadline for adhering to the existing 25 per cent public float came to the fore after the market and corporates raised a cry when in Finance Minister Nirmala Sitharaman said in the Union Budget that the time was right to consider increasing minimum public shareholding in listed companies.
"I have asked Sebi to consider raising the current threshold of 25 per cent to 35 per cent," she said.
With the government taking all steps to increase the public holding in all PSUs to 25 per cent, market players reached the conclusion that the proposal to raise the MPS could lead to some multinational companies looking at delisting rather than further diluting the promoter stake.
The Sensex crashed on the Budget proposal to increase minimum public shareholding of listed companies to 35 per cent from 25 per cent as it spooked market sentiment.
But Garg clarified that there was no decision on raising minimum public shareholding, and that only consultations have started.
Sebi is going to consult all the stakeholders, both for and against the move.
( With inputs from IANS )