The Securities and Exchange Board of India (SEBI) has announced two new ways for share sale by promoters of listen firms to raise money from the public, on Tuesday.

The market watchdog announced the institutional placement programme (IPP) and offer for sale of shares through the stock exchange in a move largely aimed at allowing the government to sell its holdings of public sector shares for billing up the budget gaps.

The announcement of the new rules comes just before a key Cabinet meeting on Wednesday. It will now allow Public Sector Undertakings like ONGC, IOC, SAIL, BHEL and NTPC to reduce government holdings. The garment is struggling to meet its disinvestment target of Rs 40,000 crore for the current financial year till march 2012.

The new rules are expected to increase the shareholding of public in listed companies. The regulatory body has also announced that it has relaxed buyback rules. The new framework will become a norm for the government to reduce its holdings in listed firms and may allow it to move closer to achieving its disinvestment targets.

“The following additional methods, viz. Institutional Placement Programme (IPP) and Offer for Sale of Shares through the Stock Exchange for the Purpose of Compliance with SCRR Requirements, are being introduced,” SEBI said in a statement.