Minimum public shareholding

The requirement that a listed Indian company keep at least 25% of its shares in public hands, which caps promoter holding at 75%.

A newly listed company that doesn't yet meet the threshold has to reach it within prescribed timelines, and very large issuers are given longer.

Its purpose is a working market in the shares. Where a promoter holds 90%, the traded price is set by a tiny float and means very little, and minority holders have no practical exit.

It also produces a predictable, dateable supply of stock. A promoter above the ceiling has to sell and the market knows it, so the overhang usually depresses the price until the sale happens. Newly listed companies given longer timelines carry the same overhang further out.