Market regulator SEBI has proposed to shift focus from promoters to controlling shareholders in a company. SEBI told that the nature of ownership of companies is changing with private equity and institutional investors picking up substantial stakes in companies. This could lead to a situation where people with no controlling rights and the minority shareholding remain to be classified as promoters.

The notion of the promoter is used in various regulations of SEBI and other regulatory authorities. Further, the classification of promoters is also important from an enforcement perspective. SEBI in a discussion paper stated that by the virtue of being called promoters, such people may influence the listed entity disproportionate to their economic interest, which may not be in the interests of all the stakeholders. Numerous firms which include new age and tech companies are non-family owned and don't have a distinctly identifiable promoter group. Furthermore, traditional and family-run companies with recognized promoters are now increasingly open to M&A opportunities and exits; instead of having a “once a promoter, always a promoter” status.

SEBI may discard the concept of classifying an entity with 20 percent or more of the equity share capital as a ‘promoter group’. According to the experts, this rule may lead to variations in the promoter group constitution of many large corporate houses, various investment holding companies may even go out of the promoter category.