Government likely to put 35% minimum shareholding rule for listed entities on hold

The source could not be named because of the sensitivity of the matter.

The rule if implemented could result in companies having to offer approximately Rs 1 trillion ($15 billion) in shares currently owned by controlling shareholders to the public, analysts have said.

The government is also looking at a number of other issues such as foreign portfolio investors' (FPIs) tax concerns, the source added.

The government's proposal to increase taxes on those with annual incomes of more than Rs 20 million has rattled many foreign portfolio investors.

Foreign investors have been urging the government to reconsider its decision, arguing the move will hit the competitiveness of Indian capital markets.

"(On) the FPI tax issue we are putting our heads together," the source said, adding that the Prime Minister's Office, his Economic Advisory Council and the government's think-tank Niti Aayog are looking at the issue.

"The economic affairs department has been asked to do a study on the issue," the source added. "We are also mulling an investment advisory council with representations from government and businesses for early resolution of issues faced by investor and business community in the country."