Most members of the capital market regulator’s committee on the primary market have raised concerns over the government’s controversial budget proposal to increase the minimum public shareholding to 35 per cent for all listed companies. 
The Securities and Exchange Board of India’s 24-member panel, led by former InfosysNSE 0.14 % chief financial officer TV Mohandas Pai, debated the matter  but was unable to take a final decision. 
The concerns raised during the meeting included the timing of the implementation of the proposal given the current market conditions, inability of state-owned companies to comply with the current 25 per cent minimum public shareholding, potential flight of capital and disadvantages for listed multinational companies, said two people who attended the discussions. 
 Nirmala Sitharaman, in her maiden budget, asked SEBI to consider the proposal of increasing shares held by the public to a minimum 35 per cent from 25 per cent at present. This proposal, along with an increase in tax surcharge on many foreign portfolio investors, damaged investor sentiment.