If a member is a subsidiary with majority of its equity stake held by the parent, how can the DPG be identified?
DPG can be a combination or either of direct and indirect holding of DPG constituents in the member company. For example, if 40% stake is held by individual DPG constituents in a member company and 60% held by a corporate ABC, then DPG can be identified by adding direct stake to indirect stake of the DPG constituents in the member company. However, the indirect stake would be calculated on a proportionate basis. In the instant case, if the DPG constituents hold 25% in ABC, the indirect eligible stake would be (60*25)/100=15%. Thus the DPG would be 40 %(direct) + 15 % (indirect support) =55%. If the entire stake of the member company is held by a corporate, the DPG can be identified from the parent company in the same manner as identified for a member company, as described in question no.1. The DPG shareholders will have to submit corporate support undertaking along with the board resolution for corporate support to form DPG in Member Company.
