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ABSTRACT 

Promoters, as the entities exercising control over the company and its affairs, act as the soul and drivers of the company. However, with this level of authority, come immense responsibilities, liabilities and obligations, of which such promoter entities may not want to bear the burden. Therefore, in keeping with the market sentiment, the Securities and Exchange Board of India, through the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, has developed the regulatory framework for promoters to be reclassified as public shareholders or ordinary shareholders in public limited companies, which are listed or in the process of being listed on the stock exchanges. The market has been taking advantage of these provisions and hence, there has been a shift in the trend in Indian Capital Markets, wherein companies are shifting from promoter-driven entities to Professionally Managed Companies. This paper shall explore the concept of a promoter along with the responsibilities and liabilities associated therewith, with emphasis on promoter contribution requirements. It shall then move forward into dissecting the drivers behind this changing trend and analyse the impact on the companies, management, investors and market as a whole.

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