Swiss-firm Novartis AG has said that it is reducing its stake in Novartis India in order to meet Securities Exchange Board of India (SEBI) regulations on the minimum public shareholding in all listed firms.

Novartis AG, which is based in Basel, Switzerland, is planning to reduce its stake in the Indian unit through the stock exchange mechanism, Novartis India said in a filing with the Bombay Stock Exchange (BSE). Novartis AG had a stake of 76.42 stake in Novartis India as of September 30, 2012.

"This will enable the company to comply with the minimum public shareholding requirement as prescribed under Securities Contract Regulation Rules and Clause 40A of the Listing Agreement," Novartis India wrote.

Under the guidelines released by the Securities Exchange Board of India (SEBI), the public firms should have a minimum public shareholding of 25 per cent by the month of June 2013. All public listed firms in the country will be required to comply with the regulations in time to avoid fines or punitive actions from the authorities.

The shares of Novartis India increased 2.83 per cent and were trading at Rs. 593.50 on the Bombay Stock Exchange (BSE).