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June 14, 2026
The Dispatch

Definition

Minimum Public Shareholding (MPS)

MPS rules require listed companies to keep at least 25% of shares with the public, ensuring enough free float for fair trading.

SEBI mandates that promoters of listed companies hold no more than 75%, keeping a minimum 25% public shareholding. This ensures adequate free float, liquidity, and price discovery, and prevents promoters from cornering the stock.

Companies that breach MPS (often after an IPO or acquisition) must restore it within a set time using routes like OFS, QIP, or rights issues. PSUs have at times been given relaxations and extended timelines. Failure can lead to trading restrictions on promoter holdings.

Related terms

  • PromoterA promoter is the founder or controlling shareholder group that establishes and effectively controls a company.
  • Free FloatFree float is the portion of a company's shares that is freely available for trading by the public, excluding locked or strategic holdings.
  • Offer for Sale (OFS)An OFS is the route through which existing shareholders sell their shares to the public — either as part of an IPO or via a separate exchange mechanism — with proceeds going to them rather than the company.

Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.