The Securities and Exchange Board of India (SEBI) granted some listed companies an exemption from the minimum 25 percent public shareholding requirement. Such companies had to satisfy which of the following conditions?

Introduction / Context:
SEBI regulates capital markets in India and frames rules for transparency, investor protection, and market liquidity. One such rule is the minimum public shareholding requirement, which generally requires at least 25 percent of a company's shares to be held by the public. At one point, SEBI decided to relax this rule for certain large and widely held companies if they met specific quantitative criteria. This question checks if you know which conditions had to be satisfied to get that exemption.

Given Data / Assumptions:

• SEBI has a rule requiring 25 percent minimum public shareholding.
• Certain companies were exempted from this rule.
• Three possible conditions are listed:
  • A: Market capitalisation of Rs 1,000 crore.
  • B: At least 20 million shares listed.
  • C: Turnover of Rs 400 crore per annum.
• The options combine these conditions in different ways.

Concept / Approach:
The concept tested is knowledge of SEBI's quantitative norms for large listed companies. The exemption was granted to companies that already had a very large market value and a broad shareholder base, measured through the number of listed shares. Therefore, conditions A and B together were the basis for the exemption. Turnover, although important for business performance, was not the criterion used in this specific regulatory relaxation.

Step-by-Step Solution:
Step 1: Read each of the three conditions carefully: A for market capitalisation, B for number of listed shares, C for turnover. Step 2: Recall that SEBI's focus for the exemption was on large market capitalisation and broad shareholding, not on turnover figures. Step 3: Identify that conditions A (market capitalisation of Rs 1,000 crore) and B (20 million shares listed) are the two that match SEBI's criteria. Step 4: Note that condition C (turnover of Rs 400 crore per annum) does not appear as an exemption criterion in this context. Step 5: Choose the option that combines A and B but excludes C, which is “Both A and B”.

Verification / Alternative check:
To verify, think about the objective behind minimum public shareholding. The goal is to ensure adequate free float and liquidity. Companies with huge market capitalisation and millions of listed shares already provide this liquidity, even if promoter holding is high. Turnover, by contrast, measures sales or revenue, not the spread of shareholding. That is why conditions related to capitalisation and listed shares were used, confirming that A and B are the correct pair for the exemption.

Why Other Options Are Wrong:
Only condition A: Market capitalisation alone does not guarantee broad share distribution; number of listed shares also matters.
Only condition B: Having many shares listed without sufficient market capitalisation may not reflect the same level of market depth.
Only condition C: Turnover is about business performance, not directly about market liquidity or shareholding structure.
A, B and C: This would make turnover mandatory, which was not part of the specific exemption norms given by SEBI in this case.

Common Pitfalls:
Students sometimes assume that a higher turnover automatically justifies regulatory relaxations, which is not always true. Another error is to focus on only one quantitative indicator without seeing why regulators combine multiple indicators like market capitalisation and share count. Always connect the rule to its purpose: in this case, public shareholding and liquidity, not sales revenue.

Final Answer:
SEBI granted the exemption to companies that satisfied both condition A and condition B, that is, a market capitalisation of Rs 1,000 crore and at least 20 million shares listed.