FREQUENTLY ASKED QUESTIONS

ON

SEBI (SUBSTANTIAL ACQUISITION OF SHARES AND TAKEOVERS)

REGULATIONS, 2011

These FAQs offer only a simplistic explanation/clarification of terms/concepts

related to the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations,
2011 [“SAST Regulations, 2011”]. Any such explanation/clarification that is
provided herein should not be regarded as an interpretation of law nor be treated as
a binding opinion/guidance from the Securities and Exchange Board of India
[“SEBI”]. For full particulars of laws governing the substantial acquisition of shares
and takeovers, please refer to actual text of the Acts/Regulations/Circulars
appearing under the Legal Framework Section on the SEBI website.

1. Please provide details as to how the regulatory framework governing

Takeovers has evolved over a period?

 The earliest attempts at regulating takeovers in India can be traced back to

the 1990s with the incorporation of Clause 40 in the Listing Agreement.

 While, the SEBI (Substantial Acquisition of Shares and Takeovers)

Regulations, 1994 which were notified in November 1994 made way for
regulation of hostile takeovers and competitive offers for the first time; the
subsequent regulatory experience from such offers brought out certain
inadequacies existing in those Regulations. As a result, the SEBI (Substantial
Acquisition of Shares and Takeovers) Regulations, 1997 were introduced
and notified on February 20, 1997, pursuant to repeal of the 1994
Regulations.

 Owing to several factors such as the growth of Mergers & Acquisitions activity
in India as the preferred mode of restructuring, the increasing sophistication
of takeover market, the decade long regulatory experience and various
judicial pronouncements, it was felt necessary to review the Takeover
Regulations 1997. Accordingly, SEBI formed a Takeover Regulations
Advisory Committee (TRAC) in September 2009 under the Chairmanship of
(Late) Shri. C. Achuthan, Former Presiding Officer, Securities Appellate
Tribunal (SAT) for this purpose. After extensive public consultation on the
report submitted by TRAC, SEBI came out with the SAST Regulations 2011
which were notified on September 23, 2011. The Takeover Regulations,
1997 stand repealed from October 22, 2011, i.e. the date on which SAST
Regulations, 2011 come into force.

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2. What is the significance of the notification related to SAST Regulations,
2011 published on September 23, 2011?

Vide the said notification dated September 23, 2011, the SAST Regulations,
2011 were notified to replace SEBI (Substantial Acquisition of Shares and
Takeovers) Regulations, 1997, since repealed.

SAST Regulations, 2011 come into force with effect from October 22, 2011.
SAST Regulations, 2011 are available on SEBI’s website under the section legal
framework.

3. When the Takeover Regulations, 2011 have come in to force?

October 22, 2011 i.e. 30th day from the date of notification. (September 23, 2011
i.e. date of notification has been taken as the first day for computing 30 days).

4. What is meant by Takeovers & Substantial acquisition of shares?

When an “acquirer” takes over the control of the “Target Company”, it is termed
as Takeover. When an acquirer acquires “substantial quantity of shares or
voting rights” of the Target Company, it results into substantial acquisition of
shares.

5. Who is an ‘Acquirer’?

Acquirer means any person who, whether by himself, or through, or with persons
acting in concert with him, directly or indirectly, acquires or agrees to acquire
shares or voting rights in, or control over a target company. An acquirer can be
a natural person, a corporate entity or any other legal entity.

6. What is meant by Persons acting in Concert or ‘PAC’ in the context of

SAST Regulations, 2011?

PACs are individual(s)/company (ies) or any other legal entity (ies) who, with a
common objective or purpose of acquisition of shares or voting rights in, or
exercise of control over the target company, pursuant to an agreement or
understanding, formal or informal, directly or indirectly co-operate for acquisition
of shares or voting rights in, or exercise of control over the target company.

SAST Regulations, 2011 define various categories of persons who are deemed
to be acting in concert with other persons in the same category, unless the
contrary is established.

7. What is a ‘Target Company’?

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 The company / body corporate or corporation whose equity shares are listed in
a stock Exchange and in which a change of shareholding or control is proposed
by an acquirer, is referred to as the ‘Target Company’.

8. What is an open offer under the SAST Regulations, 2011?

An open offer is an offer made by the acquirer to the shareholders of the target
company inviting them to tender their shares in the target company at a particular
price. The primary purpose of an open offer is to provide an exit option to the
shareholders of the target company on account of the change in control or
substantial acquisition of shares, occurring in the target company.

9. Under which situations is an open offer required to be made by an

acquirer?

If an acquirer has agreed to acquire or acquired control over a target company

or shares or voting rights in a target company which would be in excess of the
threshold limits, then the acquirer is required to make an open offer to
shareholders of the target company.

10. What are the threshold limits for acquisition of shares / voting rights,
beyond which an obligation to make an open offer is triggered?

 Acquisition of 25% or more shares or voting rights: An acquirer, who

(along with PACs, if any) holds less than 25% shares or voting rights in a
target company and agrees to acquire shares or acquires shares which along
with his/ PAC’s existing shareholding would entitle him to exercise 25% or
more shares or voting rights in a target company, will need to make an open
offer before acquiring such additional shares.

 Acquisition of more than 5% shares or voting rights in a financial year:

An acquirer who (along with PACs, if any) holds 25% or more but less than
the maximum permissible non-public shareholding in a target company, can
acquire additional shares in the target company as would entitle him to
exercise more than 5% of the voting rights in any financial year ending March
31, only after making an open offer.

11. How is the maximum permissible non-public shareholding in a listed

company defined?

Maximum permissible non-public shareholding is derived based on the minimum

public shareholding requirement under the Securities Contracts (Regulations)
Rules 1957 (“SCRR”). Rule 19A of SCRR requires all listed companies (other
than public sector companies) to maintain public shareholding of at least 25% of
share capital of the company. Thus by deduction, the maximum number of
shares which can be held by promoters i.e. Maximum permissible non-public

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 shareholding) in a listed companies (other than public sector companies) is 75%
of the share capital.

12. What is the basis of computation of the creeping acquisitions limit under
Regulation 3(2) of Takeover Regulations 2011?

For computing acquisitions limits for creeping acquisition specified under

regulation 3(2), gross acquisitions/ purchases shall be taken in to account
thereby ignoring any intermittent fall in shareholding or voting rights whether
owing to disposal of shares or dilution of voting rights on account of fresh issue
of shares by the target company.

13. Whether for the purpose of the creeping acquisition in terms of the
Takeover Regulations, 2011, the Creeping Acquisition made during the
period 01.04.2011 to 22.10.2011 will be considered?

The Takeover Regulations, 2011 have clearly defined the financial year as the
period of 12 months commencing on the first day of the month of April.

Thus, for the purpose of the creeping acquisitions under Regulation 3(2) of
Takeovers Regulations 2011, shares acquired during 1/4/2011 to 22/10/2011 will
be taken in to account.

14. Whether hostile offers/bids are permitted under the new regulations?

There is no such term as hostile bid in the regulations. The hostile bid is
generally understood to be an unsolicited bid by a person, without any
arrangement or MOU with persons currently in control.

Any person with or without holding any shares in a target company, can make
an offer to acquire shares of a listed company subject to minimum offer size of
26%.

15. What is a voluntary open offer?

A voluntary open offer under Regulation 6, is an offer made by a person who

himself or through Persons acting in concert ,if any, holds 25% or more shares
or voting rights in the target company but less than the maximum permissible
non-public shareholding limit.

16. What are the restrictions on acquirers making a voluntary open offer?

A voluntary offer cannot be made if the acquirer or PACs with him has acquired
any shares of the target company in the 52 weeks prior to the voluntary offer.
The acquirer is prohibited from acquiring any shares during the offer period other
than those acquired in the open offer. The acquirer is also not entitled to acquire

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 any shares for a period of 6 months, after completion of open offer except
pursuant to another voluntary open offer.

17. Can a person holding less than 25% of the voting rights/ shares in a target
company, make an offer?

Yes, any person holding less than 25% of shares/ voting rights in a target
company can make an open offer provided the open offer is for a minimum of
26% of the share capital of the company.

18. How is the voluntary offer made by a person holding less than 25% of
shares/ voting rights in a target company different from the voluntary offer
made by a person holding more than 25% of shares/ voting rights of the
target company?

Voluntary offer by a person Voluntary offer by a person holding

holding less than 25% more than 25%

Minimum offer size of 26%. Minimum offer size of 10%.

Maximum can be for entire share The maximum offer size is linked to
capital of the target company. maximum permissible non public
shareholding permitted under
Securities Contracts (Regulations)
Rules 1957.
No such conditions  Acquirer should not have
acquired any shares during 52
weeks period prior to Public
Announcement.

 Acquirer is not entitled to

acquire any shares of the target
company for a period of 6
months after the completion of
the open offer except for a
voluntary open offer.

19. Proposed acquisition of which type of securities, beyond the stipulated

thresholds, leads to an obligation of making an open offer?

Acquisition of equity shares carrying voting rights or any security which entitles
the holder thereof to exercise voting rights, beyond the prescribed threshold
limits, leads to the obligation of making an open offer. GDR (Global Depository
Receipts) which by virtue of depository agreement or otherwise, carrying voting
rights is an example of a security which entitles the holder to exercise voting
rights but is not an equity share.

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 20. Do all acquisitions of shares in excess of the prescribed limits and / or
control lead to an open offer?

No. In respect of certain acquisitions, SAST Regulations, 2011 provide

exemption from the requirements of making an open offer, subject to certain
conditions being fulfilled. For example, acquisition pursuant to inter- se transfer
of shares between certain categories of shareholders; acquisition in the ordinary
course of business by entities like Underwriter registered with SEBI, stock
brokers, merchant bankers acting as stabilizing agent, Scheduled Commercial
Bank (SCB), acting as an escrow agent; etc. For more details, please refer to
regulation 10 of SAST Regulations, 2011.

21. Does SEBI have the power to grant exemption to an acquirer from making
an open offer or grant relaxation from the strict compliance with
prescribed provisions of the open offer process, even if the proposed
acquisition of shares or control is not covered under the exemptions
prescribed in SAST Regulations,2011?

Yes. In the interest of the securities market, upon an application made by the
acquirer, SEBI has the power to grant exemption from the requirements of
making an open offer or grant a relaxation from strict compliance with prescribed
provisions of the open offer process.

Before undertaking such acquisition, SEBI may at its discretion refer the
application to a panel of experts constituted by SEBI. The orders passed in such
matters would be uploaded on SEBI’s website.

22. Do only direct acquisitions of shares or control of the target company lead
to the requirement of making an open offer?

No. The requirement to make an open offer arises even if there is an indirect
acquisition of shares and / or control of the target company. An indirect
acquisition would be the acquisition of shares or control over another entity by
an acquirer that would enable the acquirer to exercise or direct to exercise voting
rights beyond the stipulated thresholds or control over the target company.

23A.How are the thresholds for the requirement of making an open offer in
case of an indirect acquisition computed?1

The thresholds for the requirement of making an open offer in case of an indirect
acquisition are computed on the basis of the voting rights and/or control acquired
in the target company. Further, the quantum of acquisition of the target company
in case of an indirect acquisition cannot be computed on a pro rata basis. This
is illustrated as below:

1 Inserted on 11-01-2016.

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  If X acquires 40% shares of Y along with majority control of Y which, in turn,
holds 70% shares of Z, a listed company along with majority control of Z, then
X, in effect, acquires control on 70% shares of Z held by Y. Therefore, X will
be required to make an open offer for the shareholders of Z.
 Now; If X, which already holds 40% shares of Y and majority control of Y,
further acquires additional 10% shares of Y, then X, in effect, does not
acquire control on any shares additional to 70% shares of Z held by Y.
Therefore, X will not be required to make an open offer for the shareholders
of Z. It may be noted that the computation of quantum of additional shares
acquired by X in Z as 10% of 70%, i.e., 7% on pro rata basis is not correct.
Here, X does not acquire any additional shares of Z either directly or indirectly
by acquiring additional 10% shares of Y.
 Now; if A and B are in joint control of X which holds majority control of Y
which, in turn, holds 70% shares of Z along with its majority control and A
acquires sole control of X pursuant to cessation of control of X by B, then A,
in effect, acquires sole control of Z indirectly through X and Y. Therefore, X
will be required to make an open offer for the shareholders of Z.

23. What is a competitive offer?

Competitive offer is an offer made by a person, other than the acquirer who has
made the first public announcement. A competitive offer shall be made within 15
working days of the date of the Detailed Public Statement (DPS) made by the
acquirer who has made the first PA.

24. What happens if there is a competitive offer?

If there is a competitive offer, the acquirer who has made the original public
announcement can revise the terms of his open offer provided the revised terms
are favorable to the shareholders of the target company. Further, the bidders are
entitled to make revision in the offer price up to 3 working days prior to the
opening of the offer. The schedule of activities and the offer opening and closing
of all competing offers shall be carried out with identical timelines.

25. What is a conditional offer?

An offer in which the acquirer has stipulated a minimum level of acceptance is

known as a ‘conditional offer’.

26. What is meant by the term ‘minimum level of acceptance’?

‘Minimum level of acceptance’ implies minimum number of shares which the

acquirer desires under the said conditional offer. If the number of shares validly
tendered in the conditional offer, are less than the minimum level of acceptance

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 stipulated by the acquirer, then the acquirer is not bound to accept any shares
under the offer.

27. If the minimum level of acceptance is not reached, can the acquirer
acquire shares under the Share Purchase Agreement, which triggered the
offer?

In a conditional offer, if the minimum level of acceptance is not reached, the

acquirer shall not acquire any shares in the target company under the open offer
or the Share Purchase Agreement which has triggered the open offer.

28. What is the stipulated size of an open offer?

An open offer, other than a voluntary open offer under Regulation 6, must be
made for a minimum of 26% of the target company’s share capital. The size of
voluntary open offer under Regulation 6 must be for at least 10% of the target
company’s share capital. Further the offer size percentage is calculated on the
fully diluted share capital of the target company taking in to account potential
increase in the number of outstanding shares as on 10th working day from the
closure of the open offer.

29. What is ‘offer price’ and can the acquirer revise the offer price?

Offer price is the price at which the acquirer announces to acquire shares from
the public shareholders under the open offer. The offer price shall not be less
than the price as calculated under regulation 8 of the SAST Regulations, 2011
for frequently or infrequently traded shares.

Acquirer can make an upward revision to the offer price at any time up to 3
working days prior to the opening of the offer.

30. How do you determine whether the shares of the target company are
frequently traded or infrequently traded?

The shares of the target company will be deemed to be frequently traded if the
traded turnover on any stock exchange during the 12 calendar months preceding
the calendar month, in which the PA is made, is at least 10% of the total number
of shares of the target company. If the said turnover is less than 10%, it will be
deemed to be infrequently traded.

31. How is the offer price calculated in case shares are frequently traded on
the stock exchange?

If the target company’s shares are frequently traded then the open offer price for
acquisition of shares under the minimum open offer shall be highest of the
following:

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  Highest negotiated price per share under the share purchase agreement
(“SPA”) triggering the offer;
 Volume weighted average price of shares acquired by the acquirer during 52
weeks preceding the public announcement (“PA”);
 Highest price paid for any acquisition by the acquirer during 26 weeks
immediately preceding the PA;
 Volume weighted average market price for sixty trading days preceding the
PA.

32. How is the offer price calculated in case shares are infrequently traded on
the stock exchange?

If the target company’s shares are infrequently traded, then the open offer price
for acquisition of shares under the minimum open offer shall be highest of the
following:

 Highest negotiated price per share under the share purchase agreement
(“SPA”) triggering the offer;
 Volume weighted average price of shares acquired by the acquirer during 52
weeks preceding the public announcement (“PA”);
 Highest price paid for any acquisition by the acquirer during 26 weeks
immediately preceding the PA;
 The price determined by the acquirer and the manager to the open offer after
taking into account valuation parameters including book value, comparable
trading multiples, and such other parameters that are customary for valuation
of shares of such companies.

It may be noted that the Board may at the expense of the acquirer, require
valuation of shares by an independent merchant banker other than the manager
to the offer or any independent chartered accountant in practice having a
minimum experience of 10 years.

33. Will the promoter be entitled to non-compete or any other fees other than
the offer price?

As per the SAST Regulations, 2011, all shareholders will be given equitable
treatment and no Promoter or shareholder can be paid any extra price, by
whatever name it may be called.

34. Are there special provisions for determining the offer price in case of open
offer arising out of indirect acquisition of a target company?

Yes. Since indirect acquisitions involve acquiring the target company as a part
of a larger business, SAST Regulations, 2011 have prescribed additional
parameters to be taken into account for determination of the offer price. If the

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 size of the target company exceeds certain thresholds as compared to the size
of the entity or business being acquired then the acquirer is required to compute
and disclose in the letter of offer, the per share value of the target company taken
into account for the acquisition, along with the methodology. (Kindly refer to
Regulation 5). Further, in indirect acquisitions which are not in the nature of
deemed direct acquisition, the offer price shall stand enhanced by an amount
equal to a sum determined at the rate of 10% per annum for the period between
the date on which primary acquisition was contracted and the date of Detailed
Public Statement.

35. What is the difference between ‘offer period’ and ‘tendering period’?

The term ‘offer period’ pertains to the period starting from the date of the event
triggering open offer till completion of payment of consideration to shareholders
by the acquirer or withdrawal of the offer by the acquirer as the case may be.

The term ‘tendering period’ refers to the 10 working days period falling within the
offer period, during which the eligible shareholders who wish to accept the open
offer can tender their shares in the open offer.

36. Who are eligible shareholders?

All shareholders of the target company other than the acquirer, persons acting
in concert with him and the parties to underlying agreement which triggered open
offer including persons deemed to be acting in concert with such parties,
irrespective of whether they are shareholders as on identified date or not.

37. What are the typical steps and corresponding timelines, in an open offer
process?

Under most scenarios (except in certain types of indirect acquisitions) on the day
of the triggering event, the acquirer is required to make a Public Announcement
to the stock exchanges where shares of Target Company are listed and to SEBI.
Within 5 working days thereafter, the acquirer is required to publish a Detailed
Public Statement (DPS) in newspapers and also submit a copy to SEBI, after
creation of an escrow account.

Within 5 working days of publication DPS, the acquirer through the manager to
the offer is required to file a draft letter of offer with SEBI for its observations.
The letter of offer is dispatched to the shareholders of the target company, as on
the identified date, after duly incorporating the changes indicated by SEBI, if
there are any.

The offer shall open not later than 12 working days from the date of receipt of
SEBI’s observations. The acquirer is required to issue an advertisement
announcing the final schedule of the open offer, one working day before opening

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 of the offer. The offer shall remain open for 10 working days from the date of
opening of the offer. Within 10 working days after the closure of the offer, the
acquirer shall make payments to the shareholders whose shares have been
accepted. A post offer advertisement, giving details of the acquisitions, is
required to be published by the acquirer within 5 workings days of the completion
of payments under the open offer.

38. What is ‘identified date’ in the context of SAST Regulations, 2011?

Identified date means the date 10 working days prior to the commencement of
the tendering period, for the purposes of determining the shareholders of the
target company to whom the letter of offer along with the form of acceptance
shall be sent.

39. What is the purpose of the escrow account in the open offer process?

The acquirer is required to deposit some percentage of the offer price, in an

escrow account before issuing a Detailed Public Statement. This serves as a
security for performance of acquirer’s obligations under the open offer.

40A.Can cash component of the escrow account in the open offer process be
maintained in an interest bearing account?2

Yes, the cash component of the escrow account may be maintained in an

interest bearing account. However, the merchant banker shall ensure that the
funds are available at the time of making payment to shareholders.

40. At what point of time in the process does a Merchant Banker need to be
appointed and what is its role in the open offer process?

The Acquirer is required to appoint a Merchant Banker, registered with SEBI, as

manager to the open offer before making the PA. The PA is required to be made
through the said manager to the open offer.

The manager to the open offer has to exercise due diligence and ensure
compliance with SAST Regulations, 2011. The manager to the open offer has to
ensure that the contents of the PA, DPS, letter of offer and the post offer
advertisement are true, fair and adequate in all material aspects and are in
compliance with the requirements of SAST Regulations, 2011. Further, the
manager to the open offer has to ensure that the acquirer is able to implement
the open offer and firm arrangements for funds through verifiable means have
been made by the acquirer to meet the payment obligations under the open offer.

41. What is a letter of offer? Does SEBI approve the draft Letter of Offer?

2 Inserted on 2-11-2015.

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 The letter of offer is a document which is dispatched to all shareholders of the
target company as on identified date. This is also made available on the website
of SEBI.

Prior to dispatch of letter of offer to shareholders, a draft letter of offer is

submitted to SEBI for observations. SEBI may give its comments on the draft
letter of offer as expeditiously as possible, but not later than 15 working days of
the receipt of the draft letter of offer. SEBI may also seek clarifications and
additional information from the manager to the offer and in such a case the
period for issuance of comments shall be extended to the fifth working day from
the date of receipt of satisfactory reply to the clarifications or additional
information sought.

Filing of draft Letter of Offer with SEBI should not in any way be deemed or
construed to mean that the same has been cleared, vetted or approved by SEBI.
The draft Letter of Offer is submitted to SEBI for the limited purpose of
overseeing whether the disclosures contained therein are generally adequate
and are in conformity with the Regulations. SEBI does not take any responsibility
either for the truthfulness or correctness of any statement, financial soundness
of acquirer, or of PACs, or of the Target Company, whose shares are proposed
to be acquired or for the correctness of the statements made or opinions
expressed in the Letter of Offer.

42. How do I find the status of the draft letter of offer filed with SEBI?

SEBI updates the processing status of draft letter of offers filed with it on its
website on a periodic basis under the section “offer documents”.

43. What are the disclosures required under the Public Announcement?

Public Announcement contains minimum details about the offer, the transaction
that triggered the open offer obligations, acquirer, selling shareholders (if any),
offer price and mode of payment. SEBI has prescribed format of Public
Announcement, which is available in the SEBI website.

44. What are the disclosures required under the Detailed Public Statement?

Detailed Public Statement contains disclosure in more detail about the

acquirer/PACs, target company, financials of the acquirers/PACs/target
company, the offer, terms & conditions of the offer, procedure for acceptance
and settlement of the offer, escrow account etc. SEBI has prescribed the format
for Detailed Public Statement. The same is available in the SEBI website.

45. What are the disclosures required under the Letter of offer?

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 Letter of offer contains details about the offer, background of Acquirers/PACS,
financial statements of Acquirer/ PACs, escrow arrangement, background of the
target company, financial statements of the target company, justification for
offer price, financial arrangements, terms and conditions of the offer, procedure
for acceptance and settlement of the offer. SEBI has prescribed the format for
Letter of offer, which enumerates minimum disclosure requirements. The
Manager to the offer/ acquirer is free to add any other disclosures which in his
opinion are material for the shareholders. The format is available in the SEBI
website.

46. Is the financial disclosure standard as outlined in the Format for Detailed
Public Statement (DPS) to the Shareholders of the Target Company (TC)
in terms of Regulation 15(2)in point I(A) applicable to PACs too since the
above clause refers just to the Acquirer ?

Yes, as clearly indicated in the format, the details of financial disclosure are
required to be given for the acquirer as well Persons acting in concert with
Acquirers.

47. If an acquirer enters into a SPA and triggers an open offer, when can the
acquirer acquire shares proposed to be transferred under the SPA?

The acquirer can acquire shares under the SPA only after payment in respect of
shares accepted under the open offer is complete but not later than 26 weeks
from the expiry of the offer period.

48. What is the role of the target company in the open offer process?

 Once a PA is made, the board of directors of the Target Company is expected

to ensure that the business of the target company is conducted in the ordinary
course. Alienation of material assets, material borrowings, issue of any
authorized securities, announcement of a buy- back offer etc. is not
permitted, unless authorized by shareholders by way of a special resolution
by postal ballot.
 The target company shall furnish to the acquirer within two working days from
the identified date, a list of shareholders and a list of persons whose
applications, if any, for registration of transfer of shares, in case of physical
shares, are pending with the target company.
 After closure of the open offer, the target company is required to provide
assistance to the acquirer in verification of the shares tendered for
acceptance under the open offer, in case of physical shares.
 Upon receipt of the detailed public statement, the board of directors of the
target company shall constitute a committee of independent directors to
provide reasoned recommendations on such open offer, and the target
company shall publish such recommendations and such committee shall be
entitled to seek external professional advice at the expense of the target

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 company. The recommendations of the Independent Directors are published
in the same newspaper where the Detailed Public Statement is published by
the acquirer and are published at least 2 working days before opening of the
offer. The recommendation will also be sent to SEBI, Stock Exchanges and
the Manager to the offer.

49. What is the manner in which the acquirer decides the acceptances from
each shareholder?

The registrar to the open offer validates all the tenders in the open offer and
creates a basis of acceptance in consultation with the manager to the open offer
detailing validly and invalidly tendered shares received in the open offer.

In case, the valid shares tendered are less than the offer size, all the valid
tendered shares are accepted. If the validly tendered shares in the open offer
are more than the offer size, then the valid tenders are accepted on a
proportionate basis. This is illustrated as below:

The company has a paid up share capital of Rs, 10,000/- (1000 shares of Rs.
10/- each) and shareholder A is holding 50 shares totaling to Rs. 500. In case
an open offer is made for 26% of the share capital and the shares tendered are
300 which are in excess of the 26% shareholding, the shares will be accepted
by the acquirer on a proportionate basis.

No of shares of A accepted = ((total no of shares offered X (no of shares

in the open offer) tendered by A ))

------------------------------------
(Total shares tendered in
the Open offer by all investors)

= 260 X 50 =43.33 shares~43 shares

300

Shares which are invalid or are rejected due to the valid acceptances being more
than the offer size are subsequently returned to the respective shareholders
within 10 working days of the closure of the open offer.

50. What are the modes of payment under the open offer?

Payment considerations by the acquirer under the open offer can be made by
cash and / or by issue of equity shares and / or secured debt instruments
(investment grade) and / or convertible debt instruments (convertible to equity
shares) of acquirer (or PACs, if any) if such equity shares and secured debt
instruments are listed.

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 The chosen mode of payment is required to be disclosed in the open offer
document meant for shareholders of the target company.

51. Can an acquirer withdraw the open offer once made?

An open offer once made cannot be withdrawn except in the following

circumstances:
 Statutory approvals required for the open offer or for effecting the acquisitions
attracting the obligation to make an open offer have been refused subject to
such requirement for approvals having been specifically disclosed in the DPS
and the letter of offer;
 Any condition stipulated in the SPA attracting the obligation to make the open
offer is not met for reasons outside the reasonable control of the acquirer,
subject to such conditions having been specifically disclosed in the DPS and
the letter of offer;
 Sole acquirer being a natural person has died;
 Such circumstances which in the opinion of SEBI merit withdrawal of open
offer.

52. If post open offer the shareholding of the acquirer goes beyond the
maximum permissible non-public shareholding limit, can the acquirer
immediately make a delisting offer in terms of Delisting Regulations. ?

No. The acquirer cannot launch a voluntary delisting offer in terms of Delisting
Regulations of SEBI, unless a period of twelve months has elapsed from the
date of the completion of the offer period.

53. I was not holding shares on the identified date but acquired shares
subsequently. Am I eligible to participate in the open offer?

Yes. Shareholders who acquire shares after the identified date are eligible to
participate in the open offer provided they submit their valid tenders before the
end of the tendering period.

You may send a request to the registrar to the open offer or manager to the open
offer for obtaining the letter of offer including the form of acceptance. Alternately,
you can make an application on plain paper giving certain specific details. Please
refer to the Detailed Public Statement of the acquirer for instructions in this
regard.

54. How will shareholder of the target company know that an open offer is
made by the acquirer?

SAST Regulations, 2011 provides for wide dissemination of the information

related to an open offer. The DPS and pre-offer announcements before
commencement of the tendering period are published in national newspapers as

Page 15 of 29
 well as in one newspaper of the regional language of the place where registered
office of the target company is located.

The final letter of offer is required to be dispatched to all shareholders whose

names appear as shareholders as on the identified date. Further, the PA, the
DPS and other announcements are also filed with the stock exchange and SEBI,
and are uploaded on their respective websites for information dissemination.

55. For how many days is an open offer required to be kept open?

The offer is required to be kept open for ten working days.

56. How do I get the Letter of Offer and tender my shares under the open
offer?

The letter of offer along with form of acceptance is sent to all eligible
shareholders of the target company, who are shareholders of the target company
as on the identified date. The eligible shareholder has to fill in the form of
acceptance sent along the letter of offer and submit the same to the registrar to
the open offer or the manager to the open offer. In case the shareholder has not
received the letter of offer, such shareholder can request the registrar to the open
offer or manager to the open offer for the same. Further, the letter of offer along
with the form of acceptance will also be available on SEBI’s website.

57. What are the documents that the shareholders should go through before
tendering their shares pursuant to the open offer?

Before tendering their shares pursuant to the open offer, the shareholders are
advised to go through the Detailed Public Statement, Letter of offer and also the
recommendations and observations of the Committee of Independent Directors
on the offer. It may be noted that all the aforesaid documents are available on
SEBI website. Further the recommendations of the Independent Directors are
published in the same newspaper where the Detailed Public Statement is
published by the acquirer and are published at least 2 working days before
opening of the offer.

58. Do I need to convert my physical shares into demat before tendering in the
open offer?

Shareholders need not convert their physical shares into demat form before
tendering shares in the open offer. Physical shares can be tendered in an open
offer along with the form of acceptance and such documents as mentioned in
the section ‘Procedure for acceptance and settlement of the Offer’ in the letter of
offer.

Page 16 of 29
59. Can I withdraw or revise my tender?

No. Once a shareholder has tendered his shares in the open offer made by the
acquirer, he/ she cannot withdraw/ revise his/her request.

60. Can I tender my shares after the closure of the tendering period?

No. Your acceptance for tendering shares in the offer should reach the collection
center on or before the last date of tendering period.

61. I hold shares which are partly paid-up. Can I tender these shares in the
open offer?

Yes, partly paid-up shares can be tendered in the open offer. The letter of offer
contains the offer price of the partly paid up share, which can be different from
the offer price for fully paid up share.

62. When will the shareholder receive (i) intimation about acceptance/
rejection of his shares tendered under the open offer or (ii) consideration
for shares accepted by the acquirer?

The shareholder shall receive (i) intimation about acceptance/ rejection of his
shares tendered under the open offer or (ii) consideration for shares accepted
by the acquirer, within 10 working days of the closure of the open offer.

63. What happens if regulatory approvals are delayed?

If the regulatory approvals required for completing the open offer and acquisition
are delayed, the acquirer may be unable to make the payment within 10 working
days of closure of open offer. In such an event, SEBI may grant extension of
time for making payments, subject to the acquirer agreeing to pay interest to the
shareholders of the target company for the delay at such rate as may be
specified by SEBI.

If statutory approvals are required for some but not all shareholders, the acquirer
can make payment to such shareholders in respect of whom no statutory
approvals are required in order to complete the open offer.

64. If the payment is delayed beyond 10 working days of the closure of the
tendering period (closure of open offer), will the acquirer be required to
compensate the public shareholders who have participated under the
offer? 3

3 Modified on 30-03-2022.

Page 17 of 29
 Acquirer is required to complete the payment of consideration to shareholders
who have accepted the offer within 10 working days from the date of closure of
the open offer. If there is a delay in payment of consideration (other than non-
receipt of statutory approvals), in accordance with provisions of Regulation
18(11A) of Takeover Regulations, acquirer would have to pay interest for the
period of delay at the rate of 10% per annum.

65. Whom do I approach if I have any grievance in respect of the open offer,
delay in receipt of consideration / unaccepted shares etc.?

The shareholder of the target company should approach the manager to the
open offer or the registrar to the open offer for any grievance. However, if the
shareholder is not satisfied or does not receive a satisfactory response to his /
her grievance, he may approach SEBI through online SEBI Complaint Redressal
System (SCORES) at www.scores.gov.in.

In case, during the open offer or before the starting of the open offer, any investor
has any comment/ complaint about the disclosures given by the acquirer in
Public Announcement or in Detailed Public statement or in draft Letter of offer
information, he can write to Corporate Finance Department, Division of
Corporate Restructuring at SEBI Bhavan, Plot No.C4-A, 'G’ Block, Bandra Kurla
Complex, Bandra (E), Mumbai 400 051. Please note that PA/DPS, Draft Letter
of offer are also available on website of SEBI.

66. Where can an investor get more information related to the SAST
Regulations, 2011?

An investor can get more information related to the SAST Regulations, 2011
from the SEBI website and from the Investors website of SEBI.

67. What are the disclosures (other than the ones given in PA/ DPS/ Letter of
offer for the open offer) required to be made in terms of SAST Regulations,
2011, by whom, when and to whom? 4

Event based Disclosures

(Please note the word “shares” for disclosure purposes include convertible
securities also.)

a. Any person, who along with PACs crosses the threshold limit of 5% of shares
or voting rights, has to disclose his aggregate shareholding and voting rights
to the Target Company at its registered office and to every Stock Exchange
where the shares of the Target Company are listed within 2 working days of
acquisition as per the format specified by SEBI.

4 Modified on 30-03-2022.

Page 18 of 29
b. Any person who holds 5% or more of shares or Voting rights of the target
company and who acquires or sells shares representing 2% or more of the
voting rights, shall disclose details of such acquisitions/ sales to the Target
company at its registered office and to every Stock Exchanges where the
shares of the Target Company are listed within 2 working days of such
transaction, as per the format specified by SEBI.

Continual disclosures of aggregate shareholding shall be made within 7

days of financial year ending on March 31 to the target company at its registered
office and every stock exchange where the shares of the Target Company are
listed by:
a. Shareholders (along with PACs, if any) holding shares or voting rights
entitling them to exercise 25% or more of the voting rights in the target
company.
b. Promoter (along with PACs, if any) of the target company irrespective of their
percentage of holding.

Disclosures of encumbered shares

a. The promoter (along with PACs) of the target company shall disclose details
of shares encumbered by them or any invocation or release of encumbrance
of shares held by them to the target company at its registered office and every
stock exchange where shares of the target company are listed, within 7
working days of such event.

[Further, the promoter of every listed company shall specifically disclose

detailed reasons for encumbrance if the combined encumbrance by the
promoter along with PACs with him equals or exceeds either 50% of their
shareholding in the company or 20% of the total share capital of the
company, in the format provided at Annexure – II of the circular no.
SEBI/HO/CFD/DCR1/CIR/P/2019/90 dated August 07, 2019, to the listed
company and every stock exchange where the shares of the company are
listed, within two working days from the creation of such encumbrance. This
is effective from October 01, 2019.

Such disclosures will be warranted on every occasion, when the extent of

encumbrance (having already breached the above threshold limits) increases
further from the prevailing levels. This disclosure requirement is therefore
applicable on every creation of encumbrance if the post event encumbrance
by promoter along with PACs with him equals or exceeds either 50% of their
shareholding in the company or 20% of the total share capital of the
company.

An illustrative example is as follows:

Page 19 of 29
 i. If the promoter has encumbered shares on January 01, 2020 and as a
result the encumbrance of promoter along with PACs increases from
NIL to 60% of their shareholding, the promoter has to disclose detailed
reasons for encumbrance.

ii. Subsequently, if the promoter once again encumbers additional shares

on February 01, 2020 and as a result the encumbrance of promoter
along with PACs increases from 60% to 65% of their shareholding, the
promoter has to again disclose detailed reasons for encumbrance.]5

b. Further, promoter also has to declare on a yearly basis that he along with
persons acting in concert has not made any encumbrance other than those
already disclosed during the financial year.

68. How to compute trigger limits specified above for disclosures.

The word “shares” for disclosure purposes include convertible securities also.
Hence for computation of trigger limits for disclosures given above, percentage
w.r.t shares shall be computed taking in to account total number of equity shares
and convertibles and the percentage w.r.t voting rights shall be computed after
considering voting rights on equity shares and other securities (like GDRs, if
such GDRs carry voting rights)

An illustration is provided below for the calculation of trigger limits for disclosures
given in point (b) of the reply to query (13).

Total Shares/ voting capital of the company

 Company A has 100 equity shares, 50 partly convertible Debentures
(PCDs) and 10 GDRs. 1 GDR carries 1 voting right.
 Total shares of company A= 100+50+10 = 160
 Total voting capital of Company A= 100+10=110

Persons B’s holding of shares and voting rights

 Person B has 8 equity shares, 7 PCDs and 1 GDR.
 Person B has 8+7+1 =16 shares (shares for disclosure purpose includes
convertible securities)
 Person B’s holding in terms of shares= 16/160=10% of shares
 Person B’s voting rights= 8+1= 9 voting rights
 Person B’s holding in terms of voting rights = 9/110=8 % of voting rights

Since person B is holding more than 5% of shares or voting rights, he is

required to make disclosures for any acquisition/ sale of 2% or more of shares
or voting rights.

5 Inserted on 03-09-2019.

Page 20 of 29
 Acquisition by Person B
Scenario I
 Person B acquires 2 equity shares and 2 PCDs.
 In terms of shares, person B has acquired 4/160=2.5% of shares
 In terms of voting rights, person B has acquired 2/110= 1.8% of voting
rights
Since acquisition done by person B represents 2 % or more of shares, the
disclosure obligation as stated at Reply of Q-13(b) is triggered.

Scenario II
Person B acquires 20 PCDs
In terms of shares, person B has acquired 20 shares, i.e. 20/160 i.e. 12.5%
shares.
In terms of voting rights, he has not acquired a single voting right i.e. 0 voting
right
However, since acquisition done by person B represents 2% or more of shares
(though no voting rights), the disclosure obligations as stated at (b) in reply 13 is
triggered.

69. What happens if the Acquirer / Target Company / Merchant Banker or the
Manager to the open offer violates the provisions of the SAST Regulations,
2011?

SAST Regulations, 2011 have laid down the general obligations of acquirer,
Target Company and the manager to the open offer. For failure to carry out these
obligations as well as for failure / non-compliance of other provisions of these
Regulations, penalties have been laid down there under. These penalties
include:

 directing the divestment of shares acquired;

 directing the transfer of the shares / proceeds of a directed sale of shares to
the investor protection fund;
 directing the target company / any depository not to give effect to any transfer
of shares;
 directing the acquirer not to exercise any voting or other rights attached to
shares acquired;
 debarring person(s) from accessing the capital market or dealing in
securities;
 directing the acquirer to make an open offer at an offer price determined by
SEBI in accordance with the Regulations;
 directing the acquirer not to cause, and the target company not to effect, any
disposal of assets of the target company or any of its subsidiaries unless
mentioned in the letter of offer;
 directing the acquirer to make an offer and pay interest on the offer price for
having failed to make an offer or has delayed an open offer;

Page 21 of 29
  directing the acquirer not to make an open offer or enter into a transaction
that would trigger an open offer, if the acquirer has failed to make payment
of the open offer consideration;
 directing the acquirer to pay interest of for delayed payment of the open offer
consideration;
 directing any person to cease and desist from exercising control acquired
over any target company;
 directing divestiture of such number of shares as would result in the
shareholding of an acquirer and persons acting in concert with him being
limited to the maximum permissible non-public shareholding limit or below.

70. What is the procedure for a company or an intermediary in case it needs

clarification or an interpretation of some provisions of SAST Regulations,
2011?

SEBI updates its FAQs section based on the queries received. You are advised
to see the FAQs section. However for seeking interpretation of a particular
provision or a no action letter pertaining to a particular transaction, the applicant
is advised to apply under the provisions of SEBI (informal Guidance) Scheme,
2003, details of which are available on the SEBI website.

71. Are scheduled commercial banks and public financial institutions exempt
from disclosure requirements under regulation 29 with regard to
acquisition of shares by them on invocation of pledge?6

Scheduled Commercial Banks (SCBs), Public Financial Institutions (“PFIs”),

Housing Finance Companies (“HFCs”) and Systematically Important Non-
Banking Finance Companies (SI-NBFCs) are not exempt from disclosure
requirements under Regulation 29 with regard to acquisition of shares by them
on invocation of pledge. They are required to make necessary disclosures upon
acquisition of shares on invocation of pledge under sub-regulation 29(1) or 29(2)
as the case may be. (Please refer to SAT Order dated October 28, 2014 in the
matter of SICOM Ltd vs SEBI.)
However, they are exempt from disclosure requirements under Regulation 29 in
connection with shares taken by way of encumbrance and shares given upon
release of encumbrance under sub-regulation 29(4). The exemption in relation
to HFCs is applicable only to deposit taking HFCs and HFCs with an asset size
of Rs. 500 crores or more, provided the HFC is registered with National Housing
Bank (“NHB”).

72. Is proof of posting of the requisite disclosure within the time specified
considered as the compliance of disclosure requirements under Takeover
Regulations?7

6
Inserted on 21-12-2015.
7 Inserted on 21-12-2015.

Page 22 of 29
 Requisite disclosures under Takeover Regulations are considered to be
complied with only when they are received by the target company and the stock
exchanges within the time specified thereunder. (Please refer to High Court of
Calcutta Order dated March 27, 2001 in the matter of Arun Kumar bajoria vs
SEBI.)

73. If the holding of any shareholder remains the same but the percentage of
shareholding or voting rights of the total paid up share capital of the target
company changes due to some corporate actions like buyback or
preferential allotment, whether the shareholder is required to make
disclosure of the change in shareholding disclosure under regulation 29(2)
of Takeover Regulations, 2011?8

No. Any change in shareholding or voting rights of a shareholders of a company

pursuant to corporate actions like buyback or preferential allotment would not
require a disclosure under regulation 29(2) of Takeover Regulations, 2011.

74. Can the letter of offer be dispatched through electronic means?9

Letter of offer can be dispatched through electronic means in accordance with

the provisions in the Companies Act, 2013. However, on receipt of a request
from any shareholder to receive a copy of the letter of offer in physical format,
the same shall be provided. Besides this, for all those shareholders who do not
have their email IDs registered with the company, the letter of offer shall be sent
physically. This shall be disclosed in the letter of offer.

75. How is the ‘volume-weighted average market price’ of shares for a period
of sixty trading days calculated under the Takeover Regulations?10

Regulation 2(1)(zb) of Takeover Regulations, 2011 defines volume-weighted

average market price (VWAP) to mean the product of the number of equity
shares traded on a stock exchange and the price of each equity share divided
by the total number of equity shares traded on the stock exchange. Accordingly,
VWAP for a period of 60 trading days is calculated by aggregating daily turnover
in the scrip over the period of 60 trading days and dividing the same by the total
number of shares traded during the said period.

For illustration,

VWAP60 = TO1+TO2+ …… + TO60

8 Inserted on 22-01-2016.
9
Inserted on 29-12-2016.
10 Inserted on 03-05-2017.

Page 23 of 29
 Q1+Q2+ ………. + Q60
[Where, VWAP60 = VWAP for a period of 60 trading days
TOn = Total turnover in the scrip on ‘nth’ trading day
Qn = Number of shares of the scrip traded on ‘nth’ trading day]

76. What are the different types of encumbrances that are required to be
disclosed under Chapter - V of the SAST Regulations, 2011?11

For the purposes of this Chapter, the term “encumbrance” shall include-
a) any restriction on the free and marketable title to shares, by whatever
name called, whether executed directly or indirectly;
b) pledge, lien, negative lien, non-disposal undertaking; or
c) any covenant, transaction, condition or arrangement in the nature of
encumbrance, by whatever name called, whether executed directly or
indirectly.

77. What are System Driven Disclosures (SDD)? 12

With the intent of ease of doing business, SEBI in consultation with the market
infrastructure institutions has decided to automate the process of filing of
disclosures as prescribed under Regulations 29 and 31 of SEBI (SAST)
Regulations at stock exchange(s) level for the companies which are listed on
nationwide stock exchanges.
Under SDD, relevant disclosures shall be disseminated by the Stock Exchanges
based on aggregation of data received from the Depositories, without human
intervention.

78. Can you explain how System Driven Disclosures work? 13

For Promoter/Promoter Group entities-

i. Listed Entities to provide details of PAN/Account numbers of

Promoter/Promoter Group to Depositories
ii. Depositories shall share the transactions for promoter/promoter group to
Stock Exchange(s) on a daily basis.
iii. Stock Exchange(s) shall combine all the transactions and calculate
whether the entities have triggered the thresholds as prescribed under the
provisions of Regulation 29.
iv. Stock Exchange(s) shall disseminate disclosures if the threshold is
exceeded.

11 Inserted on 03-09-2019.
12
Inserted on 30-03-2022.
13 Inserted on 30-03-2022.

Page 24 of 29
 For entities other than the promoter/promoter groups-

i. Depositories shall share the PAN/Account details among themselves

where the holding is more than or equal to 2% in a target company on a
daily basis.
ii. Depositories shall share the transactions to the Stock Exchange(s) where
the holding is more than 5% in a target company on a daily basis.
iii. Stock Exchange(s) shall combine all the transactions and calculate
whether the entities have triggered the thresholds as prescribed under the
provisions of Regulation 29.
iv. Stock Exchange(s) shall disseminate disclosures if the threshold is
exceeded.

79. When shall System Driven Disclosures come into force? 14

The system would continue to run parallel with the existing system i.e. entities
shall continue to independently comply with the disclosure obligations under
SEBI (SAST) Regulations as applicable to them till March 31, 2022. However,
from April 01, 2022, the requirement of submitting physical disclosures shall be
dispensed with. Nevertheless, the acquirers/sellers shall be obliged to verify the
same at time of dissemination on stock exchange and bring to the notice of stock
exchanges immediately in case of any discrepancy.

80. Which all entities are required to continue submitting manual disclosures
with the Stock Exchanges even after System Driven Disclosures (SDD)
coming into force? 15

Under Regulation 29 of SEBI (SAST) Regulations, transactions which trigger the

disclosure thresholds by acquirer/seller on an individual basis shall be disclosed
under SDD mechanism and would not require submission of physical
disclosures.

However, for the following events, entities shall be required to continue

submitting manual disclosures under the provisions of SEBI (SAST)
Regulations-

a) Triggering of disclosure requirement due to acquisition or disposal of the

shares, as the case may be, by the acquirer together with persons acting
in concert (PACs). This is illustrated as below-

 Scenario 1

14
Inserted on 30-03-2022.
15 Inserted on 30-03-2022.

Page 25 of 29
 i. If X and Y are PACs to each other and if X holds or acquires
say 3% and if Y also acquires 3%, then cumulatively their
shareholding shall be 6% and thus this scenario shall
require submission of manual disclosures under Regulation
29(1).

 Scenario 2

i. If X and Y are PACs to each other and if cumulatively they

holds 5% or more and there is change of 2% either
individually and collectively, then this scenario shall require
submission of manual disclosures under Regulation 29(2).

b) Triggering of disclosure requirement in case the shares are held in

physical form by the acquirer and/or PACs.
c) Listed companies who have not provided PAN of promoter(s) including
member(s) of the promoter group to the designated depository or
companies which have not appointed any depository as their designated
depository.
d) Where the shares of the companies are exclusively listed on the
exchange which has not developed infrastructure for automation of
disclosures.

81. What are the obligations of Listed Companies, Depositories and Stock
Exchanges under SDD mechanism? 16

Reconciliation of data shall be conducted by listed companies, stock exchanges

and depositories at least once in a quarter or immediately whenever any
discrepancy is noticed.

82. With effect from April 01, 2022, Regulation 30 is omitted. Whether the
entities under sub-regulation (1) and (2) are required to disclose their
aggregated shareholding and viting rights as of the thirty-first day of
March, 2022 needs to be disclosed? 17

Submission of requisite disclosure under Regulation 30 shall not be required for

the year ended March 31, 2022.

83. Can an acquirer make an attempt to delist the target company at the time
of making an open offer for acquiring shares or voting rights or control of

16
Inserted on 30-03-2022.
17 Inserted on 30-03-2022.

Page 26 of 29
 a target company in terms of sub-regulation (1) of regulation 3, regulation
4 or regulation 5? 18

Yes. If the acquirer is desirous of delisting a target company, the acquirer should
declare his intention to delist the target company at the time of making such
public announcement of an open offer and at the time of making the detailed
public statement (or only in the detailed public statement in case the open offer
is for an indirect acquisition that is not a deemed direct acquisition under sub-
regulation (2) of regulation 5) and fulfil the delisting offer obligations in
accordance with sub-regulation (2) of regulation 5A of Takeover Regulations.

84. Can an acquirer that has not declared his intention to delist the target
company in accordance with sub-regulation (1) of regulation 5A,
subsequently change his intent to delist the target company and rely on
regulation 5A? 19

No, the acquirer cannot attempt to delist a company under Regulation 5A with
a subsequent declaration of delisting for the purpose of the delisting offer under
sub-regulation (1) of regulation 5A.

85. In what situations will the acquirer not be permitted to attempt delisting of
the target company under regulation 5A at the time of making an open
offer? 20

An acquirer will not be permitted to attempt delisting in accordance with

regulation 5A, if such acquirer was, in the target company, during the preceding
two years from the date of the public announcement made under the regulation
5A: (i) a promoter / promoter group / person(s) in control, or (ii) directly /
indirectly associated with the promoter or any person(s) in control, or (iii) a
person(s) holding more than twenty-five percent shares or voting rights. The
acquirer will also not be permitted to attempt delisting if he/she/it acquires joint
control along with an existing promoter / person in control of the company.

Additionally, if a competing offer is made in terms of sub-regulation (1) of

regulation 20, the acquirer will not be entitled to delist the target company in
accordance with regulation 5A.

86. How is the price to be determined in the event the acquirer intends to delist
the target company under regulation 5A at the time of making an open
offer? 21

18
Inserted on 30-03-2022.
19 Inserted on 30-03-2022.
20
Inserted on 30-03-2022.
21 Inserted on 30-03-2022.

Page 27 of 29
 An acquirer that intends to delist the target company in accordance with
regulation 5A will be required to disclose (i) the open offer price determined in
accordance with regulation 8 and (ii) the indicative price for delisting, which shall
include a suitable premium reflecting the price that such acquirer is willing to
pay for the delisting offer with full disclosures of the rationale and justification
for the indicative price so determined that can also be revised upwards by the
acquirer before the start of the tendering period which shall be duly disclosed to
the shareholders. Indicative price offered by acquirer should be higher than (i)
open offer price as determined in accordance with regulation 8 (in accordance
with clause (o) of sub-regulation (1) of regulation 2 of the Delisting
Regulations) and (ii) book value of the company as computed in accordance
with the Explanation to sub-regulation (5) of regulation 22 of the Delisting
Regulations.

87. Which factors will determine payment of offer price and indicative price to
the shareholders for a delisting offer under regulation 5A? 22

In case the response to the offer leads to the delisting threshold as provided
under regulation 21 of the Delisting Regulations being met, then all shareholders
who tender their shares shall be paid the indicative price. In case the aforesaid
delisting threshold is not met, all shareholders who tender their shares shall be
paid the open offer price.

However, shareholders who have tendered shares in delisting offer shall be

entitled to withdraw such shares tendered, within five working days from the date
of announcement of failure of delisting offer. Once tendered shares are
withdrawn, shareholder shall not be entitled to the open offer price.

88. If the target company fails to get delisted pursuant to a delisting offer
under sub-regulation (1) of regulation 5A, but results in the shareholding
of the acquirer exceeding the maximum permissible non-public
shareholding threshold, can the acquirer immediately make a delisting
offer in terms of Delisting Regulations? 23

Yes, the acquirer can undertake a further attempt to delist the target company,
during the period of twelve months from the date of completion of the open offer
in accordance with the Delisting Regulations, including Reverse Book Building
method, subject to the acquirer continuing to exceed the maximum permissible
non-public shareholding in the target company.

Such further delisting attempt will be successful subject to the following

conditions:

22
Inserted on 30-03-2022.
23 Inserted on 30-03-2022.

Page 28 of 29
 (i) the delisting threshold of 90% of total issued shares, as provided under
regulation 21 of the Delisting Regulations is met; and
(ii) fifty percent of the residual public shareholding is acquired.

Upon failure of the further delisting attempt, the acquirer should ensure
compliance of the minimum public shareholding requirement of the target
company under the Securities Contract (Regulation) Rules, 1957 within a period
of twelve months from the expiry of the period granted to attempt further
delisting attempt under clause a of sub-regulation 6 of Regulation 5A.

89. What will be the floor price for a further delisting attempt undertaken after
failure to delist under regulation 5A? 24

The floor price for a further delisting attempt will be the higher of the following:
(i) the indicative price offered under the first delisting attempt made in
accordance with sub-regulation 1 & 2 of regulation 5A;
(ii) the floor price determined under the Delisting Regulations as on the relevant
date of the subsequent delisting attempt. Floor price is minimum price
determined in terms of the provisions of Regulation 8 of the Takeover
Regulations.; and
(iii) book value of the company as computed in accordance with the Explanation
to sub-regulation (5) of regulation 22 of the Delisting Regulations.

90. What happens if the acquirer at the time of open offer states upfront its
intention of remaining listed, and the total stake at the end of the tendering
period exceeds the maximum permissible non-public shareholding? 25

In such an event, the acquirer may undertake a proportionate reduction of (i) the
shares or voting rights to be acquired pursuant to the underlying agreement for
acquisition / subscription of shares or voting rights and (ii) the purchase of
shares so tendered, upon the completion of the open offer process, such that
the resulting shareholding of the acquirer in the target company does not exceed
the maximum permissible non-public shareholding prescribed under the
Securities Contract (Regulation) Rules, 1957.
However, the acquirer who is undertaking a scale down should not, in such
target company during the preceding two years from the date of the public
announcement, be:
(i) a promoter / promoter group / person(s) in control, or
(ii) directly / indirectly associated with promoter or any person(s) in control, or
(iii) a person(s) holding more than twenty-five percent shares or voting rights.

The acquirer who is undertaking a scale down should also not acquire joint
control along with an existing promoter / person in control of the company.

24
Inserted on 30-03-2022.
25 Inserted on 30-03-2022.

Page 29 of 29
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The
SEBI (Substantial Acquisition of Shares
and Takeovers) Regulations, 20111
(SEBI (Substantial Acquisition of Shares and Takeovers)
Regulations, 2011)

[As amended up to Noti. No. SEBI/LAD-NRO/GN/2023/121, dated 7-2-2023]

[23rd September, 2011]

In exercise of the powers conferred under Section 30 read with

clause (h) of sub-section (2) of Section 11 of the Securities and
Exchange Board of India Act, 1992 (15 of 1992) the Securities and
Exchange Board of India hereby, makes the following regulations,
namely:—
CHAPTER I
PRELIMINARY
1. Short title, commencement and applicability.—(1) These
regulations may be called the Securities and Exchange Board of
India (Substantial Acquisition of Shares and Takeovers)
Regulations, 2011.
(2) These regulations shall come into force on the thirtieth day from
the date of their publication in the Official Gazette.
(3) These regulations shall apply to direct and indirect acquisition of
shares or voting rights in, or control over target company 2 [:]
[Provided that these regulations shall not apply to direct and
3

indirect acquisition of shares or voting rights in, or control over a

company listed without making a public issue, on the 4 [Innovators
Growth Platform] of a recognised stock exchange.]
2. Definitions.—(1) In these regulations, unless the context
otherwise requires, the terms defined herein shall bear the meanings
assigned to them below, and their cognate expressions and variations
shall be construed accordingly,—
(a) “acquirer” means any person who, directly or indirectly,
acquires or agrees to acquire whether by himself, or through,
or with persons acting in concert with him, shares or voting
rights in, or control over a target company;
(b) “acquisition” means, directly or indirectly, acquiring or
agreeing to acquire shares or voting rights in, or control over, a
target company;
(c) “Act” means the Securities and Exchange Board of India Act,
1992 (15 of 1992);
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(d) “Board” means the Securities and Exchange Board of India

established under Section 3 of the Act;
(e) “control” includes the right to appoint majority of the directors
or to control the management or policy decisions exercisable by
a person or persons acting individually or in concert, directly or
indirectly, including by virtue of their shareholding or
management rights or shareholders agreements or voting
agreements or in any other manner:
Provided that a director or officer of a target company shall
not be considered to be in control over such target company,
merely by virtue of holding such position;
(f) “convertible security” means a security which is convertible
into or ex-changeable with equity shares of the issuer at a later
date, with or without the option of the holder of the security,
and includes convertible debt instruments and convertible
preference shares;
5
[(fa) “Delisting Regulations” means the Securities and Exchange
Board of India (Delisting of Equity Shares) Regulations, 2021;]
(g) “disinvestment” means the direct or indirect sale by the
Central Government or any State Government or by a
government company, as the case may be, of shares or voting
rights in, or control over, a target company, which is a public
sector undertaking;
(h) “enterprise value” means the value calculated as market
capitalization of a company plus debt, minority interest and
preferred shares, minus total cash and cash equivalents;
(i) “financial year” means the period of twelve months
commencing on the first day of the month of April;
(j) “frequently traded shares” means shares of a target company,
in which the traded turnover on any stock exchange during the
twelve calendar months preceding the calendar month in which
the public announcement 6 [is required to be made under these
regulations], is at least ten per cent of the total number of
shares of such class of the target company:
Provided that where the share capital of a particular class of
shares of the target company is not identical throughout such
period, the weighted average number of total shares of such
class of the target company shall represent the total number of
shares;
7
[(ja) “fugitive economic offender” shall mean an individual who is
declared a fugitive economic offender under Section 12 of the
Fugitive Economic Offenders Act, 2018 (17 of 2018).]
(k) “identified date” means the date falling on the tenth working
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day prior to the commencement of the tendering period, for the

purposes of determining the shareholders to whom the letter of
offer shall be sent;
(l) “immediate relative” means any spouse of a person, and
includes parent, brother, sister or child of such person or of the
spouse;
(m) “listing agreement” means the agreement with the stock
exchange governing the conditions of listing of shares of the
target company;
8
[(ma) “listing regulations” means the Securities and Exchange
Board of India (Listing Obligations and Disclosure
Requirements) Regulations, 2015.]
(n) “manager to the open offer” means a merchant banker
referred to in Regulation 12;
(o) “maximum permissible non-public shareholding” means such
percentage shareholding in the target company excluding the
minimum public shareholding required under the Securities
Contracts (Regulation) Rules, 1957;
(p) “offer period” means the period between the date of entering
into an agreement, formal or informal, to acquire shares, voting
rights in, or control over a target company requiring a public
announcement, or the date of the public announcement, as the
case may be, and the date on which the payment of
consideration to shareholders who have accepted the open offer
is made, or the date on which open offer is withdrawn, as the
case may be;
(q) “persons acting in concert” means,—
(1) persons who, with a common objective or purpose of
acquisition of shares or voting rights in, or exercising control
over a target company, pursuant to an agreement or
understanding, formal or informal, directly or indirectly co-
operate for acquisition of shares or voting rights in, or
exercise of control over the target company.
(2) Without prejudice to the generality of the foregoing, the
persons falling within the following categories shall be
deemed to be persons acting in concert with other persons
within the same category, unless the contrary is established,
—
(i) a company, its holding company, subsidiary company
and any company under the same management or
control;
(ii) a company, its directors, and any person entrusted with
the management of the company;
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(iii) directors of companies referred to in item (i) and (ii) of

this sub-clause and associates of such directors; (iv)
promoters and members of the promoter group;
(v) immediate relatives;
(vi) a mutual fund, its sponsor, trustees, trustee company,
and asset management company;
(vii) a collective investment scheme and its collective
investment management company, trustees and trustee
company;
(viii) a venture capital fund and its sponsor, trustees,
trustee company and asset management company;
9
[(viiia) an alternative investment fund and its sponsor,
trustees, trustee company and manager;]
(ix) 10
[***]
(x) a merchant banker and its client, who is an acquirer;
(xi) a portfolio manager and its client, who is an acquirer;
(xii) banks, financial advisors and stock brokers of the
acquirer, or of any company which is a holding company
or subsidiary of the acquirer, and where the acquirer is an
individual, of the immediate relative of such individual:
Provided that this sub-clause shall not apply to a bank
whose sole role is that of providing normal commercial
banking services or activities in relation to an open offer
under these regulations;
(xiii) an investment company or fund and any person who
has an interest in such investment company or fund as a
shareholder or unitholder having not less than 10 per cent
of the paid-up capital of the investment company or unit
capital of the fund, and any other investment company or
fund in which such person or his associate holds not less
than 10 per cent of the paid-up capital of that investment
company or unit capital of that fund:
Provided that nothing contained in this sub-clause
shall apply to holding of units of mutual funds registered
with the Board;
Explanation.—For the purposes of this clause .associate. of a
person means,—
(a) any immediate relative of such person;
(b) trusts of which such person or his immediate relative is a
trustee;
(c) partnership firm in which such person or his immediate
relative is a partner; and
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(d) members of Hindu undivided families of which such

person is a coparcener;
11 [(r) “postal ballot” means a postal ballot as provided for under
Rule 22 of the Companies (Management and Administration)
Rules, 2014 made under the Companies Act, 2013.]
(s) “promoter” has the same meaning as in the Securities and
Exchange Board of India (Issue of Capital and Disclosure
Requirements) Regulations, 2009 and includes a member of
the promoter group;
(t) “promoter group” has the same meaning as in the Securities
and Exchange Board of India (Issue of Capital and Disclosure
Requirements) Regulations, 2009;
(u) “public sector undertaking” means a target company in which,
directly or indirectly, majority of shares or voting rights or
control is held by the Central Government or any State
Government or Governments, or partly by the Central
Government and partly by one or more State Governments;
(v) “shares” means shares in the equity share capital of a target
company carrying voting rights, and includes any security
which entitles the holder thereof to exercise voting rights;
Explanation.—For the purpose of this clause shares will
include all depository receipts carrying an entitlement to
exercise voting rights in the target company;
(w) “specified” means as specified by the Board;
(x) “state-level financial institution” means a Financial
Corporation established under Section 3 or Section 3-A and
institutions notified under Section 46 of the State Financial
Corporations Act, 1951 (63 of 1951), and includes a
development corporation established as a company by a State
Government with the object of development of industries or
agricultural activities in the state;
(y) “stock exchange” means a stock exchange which has been
granted recognition under Section 4 of the Securities Contracts
(Regulation) Act, 1956 (42 of 1956);
(z) “target company” means a company and includes a body
corporate or corporation established under a Central legislation,
State legislation or Provincial legislation for the time being in
force, whoseshares are listed on a stock exchange;
(za) “tendering period” means the period within which
shareholders may tender their shares in acceptance of an open
offer to acquire shares made under these regulations;
(zb) “volume weighted average market price” means the product
of the number of equity shares traded on a stock exchange and
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the price of each equity share divided by the total number of

equity shares traded on the stock exchange;
(zc) “volume weighted average price” means the product of the
number of equity shares bought and price of each such equity
share divided by the total number of equity shares bought;
(zd) “weighted average number of total shares” means the
number of shares at the beginning of a period, adjusted for
shares cancelled, bought back or issued during the aforesaid
period, multiplied by a time-weighing factor;
12
[(ze) “wilful defaulter” means any person who is categorized as
a wilful defaulter by any bank or financial institution or
consortium thereof, in accordance with the guidelines on wilful
defaulters issued by the Reserve Bank of India and includes
any person whose director, promoter or partner is categorized
as such;]
13
[(zf)] “working day” means any working day of the Board.
(2) All other expressions unless defined herein shall have the same
meaning as have been assigned to them under the Act or the Securities
Contracts (Regulation) Act, 1956, (42 of 1956) or the 14 [Companies
Act, 2013 (18 of 2013)], or any statutory modification or re-enactment
thereto, as the case may be.
CHAPTER II
SUBSTANTIAL ACQUISITION OF SHARES, VOTING RIGHTS OR
CONTROL
3. Substantial acquisition of sharesor voting rights.—(1) No
acquirer shall acquire shares or voting rights in a target company which
taken together with shares or voting rights, if any, held by him and by
persons acting in concert with him in such target company, entitle
them to exercise twenty-five per cent or more of the voting rights in
such target company unless the acquirer makes a public announcement
of an open offer for acquiring shares of such target company in
accordance with these regulations.
(2) No acquirer, who together with persons acting in concert with
him, has acquired and holds in accordance with these regulations
shares or voting rights in a target company entitling them to exercise
Creeping Acq.
twenty-five per cent or more of the voting rights in the target company
but less than the maximum permissible non-public shareholding, shall
acquire within any financial year additional shares or voting rights in
such target company entitling them to exercise more than five per cent
of the voting rights, unless the acquirer makes a public announcement
of an open offer for acquiring shares of such target company in
accordance with these regulations:
15 [Provided that the acquisition beyond five per cent but up to ten
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per cent of the voting rights in the target company shall be permitted
for the Financial Year 2020-2021 only in respect of acquisition by a
promoter pursuant to preferential issue of equity shares by the target
company:]
[Provided further that, acquisition pursuant to a resolution plan
16

approved under Section 31 of the Insolvency and Bankruptcy Code,

2016 [No. 31 of 2016] shall be exempt from the obligation under the
proviso to the sub-regulation (2) of Regulation 3.]
Explanation.—For purposes of determining the quantum of
acquisition of additional voting rights under this sub-regulation,—
(i) gross acquisitions alone shall be taken into account regardless
of any intermittent fall in shareholding or voting rights whether
owing to disposal of shares held or dilution of voting rights
owing to fresh issue of shares by the target company.
(ii) in the case of acquisition of shares by way of issue of new
shares by the target company or where the target company has
made an issue of new shares in any given financial year, the
difference between the pre-allotment and the post-allotment
percentage voting rights shall be regarded as the quantum of
additional acquisition.
(3) For the purposes of sub-regulation (1) and sub-regulation (2),
acquisition of shares by any person,such that the individual
Indv. Exceed too shareholding of such person acquiring shares exceeds the stipulated
thresholds, shall also be attracting the obligation to make an open offer
for acquiring shares of the target company irrespective of whether there
is a change in the aggregate shareholding with persons acting in
concert.
[(4) Nothing contained in this regulation shall apply to acquisition
17

of shares or voting rights of a company by the promoters or

Promoters in ICDR shareholders in control, in terms of the provisions of Chapter VI-A of
Securities and Exchange Board of India (Issue of Capital and Disclosure
Requirements) Regulations, 2009.]
[(5) For the purpose of this regulation, any reference to “twenty-
18

five per cent” in case of listed entity which has listed its specified
securities on Innovators Growth Platform shall be read as “forty-nine
per cent”.]
► Applicability.—In the absence of express statutory authorisation, delegated
legislation in the form of rules or regulations, cannot operate retrospectively.
Regn. 3(3) in the 2011 Regulations clarified and possibly removed the
shortcoming of the 1997 Regulations, however, the language of Regn. 3(3) is not
of clarificatory or declaratory nature, SEBI v. Sunil Krishna Khaitan, (2023) 2
SCC 643.
4. Acquisition of control.—Irrespective of acquisition or holding of
Residual Net for
Control
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shares or voting rights in a target company, no acquirer shall acquire,

directly or indirectly, control over such target company unless the
acquirer makes a public announcement of an open offer for acquiring
shares of such target company in accordance with these regulations.
5. Indirect acquisition of shares or control.—(1) For the
purposes of Regulation 3 and Regulation 4, acquisition of shares or
voting rights in, or control over, any company or other entity, that
would enable any person and persons acting in concert with him to
exercise or direct the exercise of such percentage of voting rights in, or
control over, a target company, the acquisition of which would
otherwise attract the obligation to make a public announcement of an
open offer for acquiring shares under these regulations, shall be
considered as an indirect acquisition of shares or voting rights in, or
control over the target company.
(2) Notwithstanding anything contained in these regulations, in the
case of an indirect acquisition attracting the provisions of sub-
regulation (1) where,—
(a) the proportionate net asset value of the target company as a
percentage of the consolidated net asset value of the entity or
business being acquired;
(b) the proportionate sales turnover of the target company as a
percentage of the consolidated sales turnover of the entity or
business being acquired; or
(c) the proportionate market capitalisation of the target company
as a percentage of the enterprise value for the entity or
business being acquired;
is in excess of eighty per cent, on the basis of the most recent audited
annual financial statements, such indirect acquisition shall be regarded
as a direct acquisition of the target company for all purposes of these
regulations including without limitation, the obligations relating to
timing, pricing and other compliance requirements for the open offer.
Explanation.— For the purposes of computing the percentage
referred to in clause (c) of this sub-regulation, the market capitalisation
of the target company shall be taken into account on the basis of the
volume-weighted average market price of such shares on the stock
exchange for a period of sixty trading days preceding the earlier of, the
date on which the primary acquisition is contracted, and the date on
which the intention or the decision to make the primary acquisition is
announced in the public domain, as traded on the stock exchange
where the maximum volume of trading in the shares of the target
company are recorded during such period.
[5-A. Delisting offer.—(1) Notwithstanding anything contained in
19

these regulations and the Delisting Regulations, in the event the

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acquirer makes a public announcement of an open offer for acquiring

shares or voting rights or control of a target company in terms of sub-
regulation (1) of Regulation 3, Regulation 4 or Regulation 5, the
acquirer may seek the delisting of the target company by making a
delisting offer in accordance with this regulation:
Provided that the acquirer shall have declared his intention to so
delist the target company at the time of making such public
announcement of an open offer as well as at the time of making the
detailed public statement. A subsequent declaration of delisting for
the purpose of the delisting offer proposed to be made under sub-
regulation (1) shall not suffice:
Provided further that if the open offer is for an indirect acquisition
that is not a deemed direct acquisition under sub-regulation (2) of
Regulation 5, the declaration of the intent to so delist shall be made
initially only in the detailed public statement.
Explanation 1: The acquirer shall not, in such target company during
the preceding two years from the date of the public announcement
made under this regulation, be:
(i) a promoter/promoter group/person(s) in control, or
(ii) directly/indirectly associated with the promoter or any person
(s) in control, or
(iii) a person(s) holding more than twenty-five percent shares or
voting rights.
Explanation 2: The acquirer shall not acquire joint control along with
an existing promoter/person in control of the company.
(2) The delisting offer obligations shall be fulfilled by the acquirer in
the following manner:
(a) the public announcement, the detailed public statement and
the letter of offer shall mention the open offer price determined
in accordance with Regulation 8 of these regulations and the
indicative price for delisting:
Provided that if the open offer is for an indirect acquisition
that is not a deemed direct acquisition under sub-regulation
(2) of Regulation 5, the open offer price and indicative price
shall be notified by the acquirer at the time of making the
detailed public statement and in the letter of offer:
Provided further that the indicative price shall include a
suitable premium reflecting the price that the acquirer is
willing to pay for the delisting offer with full disclosures of the
rationale and justification for the indicative price so determined
that can also be revised upwards by the acquirer before the
start of the tendering period which shall be duly disclosed to
the shareholders.
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Explanation: Indicative price shall be in accordance with

clause (o) of sub-regulation (1) of Regulation 2 of the Delisting
Regulations and shall not be less than the book value of the
company as computed in accordance with the Explanation to
sub-regulation (5) of Regulation 22 of the Delisting
Regulations.
(b) in case the response to the offer leads to the delisting
threshold as provided under Regulation 21 of the Delisting
Regulations :
(i) being met, all shareholders who tender their shares shall be
paid the indicative price;
(ii) not being met, all shareholders who tender their shares
shall be paid the open offer price.
(3) Where a delisting offer made under sub-regulation (1) is not
successful:
(a) on account of the non-receipt of the prior approval of
shareholders in terms of Regulation 11 of the Delisting
Regulations; or
(b) on account of non-receipt of the prior in-principle approval of
the relevant stock exchange in terms of Regulation 12 of the
Delisting Regulations; or
(c) the threshold as specified under Regulation 21 of the Delisting
Regulations is not achieved;
the acquirer shall, within two working days in respect of such failure,
make an announcement in all the newspapers in which the detailed
public statement was made and comply with all the applicable
provisions of these regulations in relation to completing of the open
offer.
(4) Where a competing offer is made in terms of sub-regulation (1)
of Regulation 20 of these regulations:
(a) the acquirer shall not be entitled to delist the target company;
(b) the acquirer shall not be liable to pay interest to the
shareholders on account of delay due to the competing offer;
and
(c) the acquirer shall comply with all the applicable provisions of
these regulations and make an announcement in this regard,
within two working days from the date of public announcement
made in terms of sub-regulation (1) of Regulation 20, in all the
newspapers where the detailed public statement was made.
(5) The shareholders who have tendered shares in acceptance of the
offer made under sub-regulation (1), shall be entitled to withdraw such
shares tendered, within five working days from the date of the
announcement under sub-regulation (3).
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(6) Where the target company fails to get delisted pursuant to a

delisting offer under sub-regulation (1), but which results in the
shareholding of the acquirer exceeding the maximum permissible
nonpublic shareholding threshold:
(a) the acquirer may undertake a further attempt to delist the
target company in accordance with the Delisting Regulations
during the period of twelve months from the date of completion
of the open offer, subject to the acquirer continuing to exceed
the maximum permissible nonpublic shareholding in the target
company.
(b) such further delisting attempt shall be successful subject to
the following conditions:
(i) the delisting threshold as provided under Regulation 21 of
the Delisting Regulations is met; and
(ii) fifty percent of the residual public shareholding is acquired.
(c) upon failure of the further delisting attempt, the acquirer shall
ensure compliance of the minimum public shareholding
requirement of the target company under the Securities
Contract (Regulation) Rules, 1957 within a period of twelve
months from the end of the period referred to at clause (a).
(d) the floor price for a further delisting attempt as referred to at
clause (a) shall be higher of the following:
(i) the indicative price offered under the first delisting attempt;
(ii) the floor price determined under the Delisting Regulations
as on the relevant date of the subsequent attempt; and
(iii) the book value of the company as computed based on the
method stated in explanation to clause (a) under sub-
regulation (2).
(7) While undertaking delisting for the first or subsequent attempt,
all the provisions of the Delisting Regulations shall mutatis-mutandis
be applicable, save as otherwise provided in this regulation.]
6. Voluntary Offer.—(1) An acquirer, who together with persons
acting in concert with him, holds shares or voting rights in a target
company entitling them to exercise twenty-five per cent or more but
less than the maximum permissible non-public shareholding, shall be
entitled to voluntarily make a public announcement of an open offer for
acquiring shares in accordance with these regulations, subject to their
aggregate shareholding after completion of the open offer not
exceeding the maximum permissible non-public shareholding:
Provided that where an acquirer or any person acting in concert
with him has acquired shares of the target company in the preceding
fifty-two weeks without attracting the obligation to make a public
announcement of an open offer, he shall not be eligible to voluntarily
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make a public announcement of an open offer for acquiring shares

under this regulation:
[The relaxation from the first proviso is granted till March 31,
20

2021.]
Provided further that during the offer period such acquirer shall
not be entitled to acquire any shares otherwise than under the open
offer.
(2) An acquirer and persons acting in concert with him, who have
made a public announcement under this regulation to acquire shares of
a target company shall not be entitled to acquire any shares of the
target company for a period of six months after completion of the open
offer except pursuant to another voluntary open offer:
Provided that such restriction shall not prohibit the acquirer from
making a competing offer upon any other person making an open
offer for acquiring shares of the target company.
(3) Shares acquired through bonus issue or stock splits shall not be
considered for purposes of the dis-entitlement set out in this
regulation.
[(4) For the purpose of this regulation, any reference to “twenty-
21

five per cent” in case of listed entity which has listed its specified
securities on Innovators Growth Platform shall be read as “forty-nine
per cent”.]
[6-A. Notwithstanding anything contained in these regulations, no
22

person who is a wilful defaulter shall make a public announcement of

an open offer for acquiring shares or enter into any transaction that
would attract the obligation to make a public announcement of an open
offer for acquiring shares under these regulations: Provided that this
regulation shall not prohibit the wilful defaulter from making a
competing offer in accordance with Regulation 20 of these regulations
upon any other person making an open offer for acquiring shares of the
target company.]
[6-B. Notwithstanding anything contained in these regulations, no
23

person who is a fugitive economic offender shall make a public

announcement of an open offer or make a competing offer for acquiring
shares or enter into any transaction, either directly or indirectly, for
acquiring any shares or voting rights or control of a target company.]
7. Offer Size.—(1) The open offer for acquiring shares to be made
by the acquirer and persons acting in concert with him under
Regulation 3 and Regulation 4 shall be for at least twenty six per cent
of total shares of the target company, as of tenth working day from the
closure of the tendering period:
Provided that the total shares of the target company as of tenth
working day from the closure of the tendering period shall take into
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account all potential increases in the number of outstanding shares

during the offer period contemplated as of the date of the public
announcement:
Provided further that the offer size shall be proportionately
increased in case of an increase in total number of shares, after the
public announcement, which is not contemplated on the date of the
public announcement.
(2) The open offer made under Regulation 6 shall be for acquisition
of at least such number of shares as would entitle the holder thereof to
exercise an additional ten per cent of the 24 [voting rights in] the target
company, and shall not exceed such number of shares as would result
in the post-acquisition holding of the acquirer and persons acting in
concert with him exceeding the maximum permissible non-public
shareholding applicable to such target company:
Provided that in the event of a competing offer being made, the
acquirer who has voluntarily made a public announcement of an
open offer under Regulation 6 shall be entitled to increase the
number of shares for which the open offer has been made to such
number of shares as he deems fit:
Provided further that such increase in offer size shall have to be
made within a period of fifteen working days from the public
announcement of a competing offer, failing which the acquirer shall
not be entitled to increase the offer size.
(3) Upon an acquirer opting to increase the offer size under sub-
regulation (2), such open offer shall be deemed to have been made
under sub-regulation (2) of Regulation 3 and the provisions of these
regulations shall apply accordingly.
(4) In the eventthe shares accepted in the open offer were such that
the shareholding of the acquirer taken together with persons acting in
concert with him pursuant to completion of the open offer results in
their shareholding exceeding the maximum permissible non-public
shareholding, the acquirer shall be required to bring down the non-
public shareholding to the level specified and within the time permitted
under Securities Contract (Regulation) Rules, 1957.
[Provided that if the open offer has been made by an acquirer
25

under sub-regulation (1) of Regulation 3, Regulation 4 or Regulation 5

and the acquirer has stated upfront his intention to retain the listing of
the target company in the public announcement and the detailed public
statement issued pursuant to an open offer in accordance with these
regulations, the acquirer may alternatively undertake a proportionate
reduction of the shares or voting rights to be acquired pursuant to the
underlying agreement for acquisition/ subscription of shares or voting
rights and the purchase of shares so tendered, upon the completion of
the open offer process such that the resulting shareholding of the
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acquirer in the target company does not exceed the maximum

permissible non-public shareholding prescribed under the Securities
Contract (Regulation) Rules, 1957:
Provided further that in case of a preferential allotment pursuant to a
Share Subscription Agreement which may trigger an open offer as
envisaged in the above proviso, the Board Resolution and shareholder
resolution shall be appropriately worded, so as to include the effective
date of allocation/allotment and the quantum thereof.
Notwithstanding anything contained in Regulation 170 of the
Securities and Exchange Board of India (Issue of Capital and Disclosure
Requirements) Regulations, 2018, in case of undertaking a scale down
of subscription of shares or voting rights from the agreement, the
period of fifteen days for allotment of shares shall be counted from the
date of the closure of the tendering period for the open offer.
Explanation 1: The acquirer who is undertaking a scale down shall
not, in such target company during the preceding two years from the
date of the public announcement, be:
(i) a promoter/promoter group/person(s) in control, or
(ii) directly/indirectly associated with the promoter or any person
(s) in control, or
(iii) a person(s) holding more than twenty-five percent shares or
voting rights.
Explanation 2: The acquirer who is undertaking a scale down shall
not acquire joint control along with an existing promoter/person in
control of the company.]
[(5) Subject to Regulation 5-A, the acquirer whose shareholding
26

exceeds the maximum permissible non-public shareholding, pursuant

to an open offer under these regulations, shall not be eligible to make a
voluntary delisting offer under the Delisting Regulations, unless a
period of twelve months has elapsed from the date of the completion of
the offer period.]
(6) Any open offer made under these regulations shall be made to all
shareholders of the target company, other than the acquirer, persons
acting in concert with him and the parties to any underlying agreement
including persons deemed to be acting in concert with such parties, for
the sale of shares of the target company.
8. Offer Price.—(1) The open offer for acquiring shares under
Regulation 3, Regulation 4, Regulation 5 or Regulation 6 shall be made
at a price not lower than the price determined in accordance with sub-
regulation (2) or sub-regulation (3), as the case may be.
(2) In the case of direct acquisition of shares or voting rights in, or
control over the target company, and indirect acquisition of shares or
voting rights in, or control over the target company where the
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parameters referred to in sub-regulation (2) of Regulation 5 are met,

the offer price shall be the highest of,—
(a) the highest negotiated price per share of the target company
for any acquisition under the agreement attracting the
obligation to make a public announcement of an open offer;
(b) the volume-weighted average price paid or payable for
acquisitions, whether by the acquirer or by any person acting in
concert with him, during the fifty-two weeks immediately
preceding the date of the public announcement;
(c) the highest price paid or payable for any acquisition, whether
by the acquirer or by any person acting in concert with him,
during the twenty-six weeks immediately preceding the date of
the public announcement;
(d) the volume-weighted average market price of such shares for
a period of sixty trading days immediately preceding the date
of the public announcement as traded on the stock exchange
where the maximum volume of trading in the shares of the
target company are recorded during such period, provided such
shares are frequently traded;
(e) where the shares are not frequently traded, the price
determined by the acquirer and the manager to the open offer
taking into account valuation parameters including, book value,
comparable trading multiples, and such other parameters as
are customary for valuation of shares of such companies; and
(f) the per share value computed under sub-regulation (5), if
applicable.
(3) In the case of an indirect acquisition of shares or voting rights in,
or control over the target company, where the parameter referred to in
sub-regulation (2) of Regulation 5 are not met, the offer price shall be
the highest of,—
(a) the highest negotiated price per share, if any, of the target
company for any acquisition under the agreement attracting
the obligation to make a public announcement of an open offer;
(b) the volume-weighted average price paid or payable for any
acquisition, whether by the acquirer or by any person acting in
concert with him, during the fifty-two weeks immediately
preceding the earlier of, the date on which the primary
acquisition is contracted, and the date on which the intention
or the decision to make the primary acquisition is announced in
the public domain;
(c) the highest price paid or payable for any acquisition, whether
by the acquirer or by any person acting in concert with him,
during the twenty-six weeks immediately preceding the earlier
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of, the date on which the primary acquisition is contracted, and

the date on which the intention or the decision to make the
primary acquisition is announced in the public domain;
(d) the highest price paid or payable for any acquisition, whether
by the acquirer or by any person acting in concert with him,
between the earlier of, the date on which the primary
acquisition is contracted, and the date on which the intention
or the decision to make the primary acquisition is announced in
the public domain, and the date of the public announcement of
the open offer for shares of the target company made under
these regulations;
(e) the volume-weighted average market price of the shares for a
period of sixty trading days immediately preceding the earlier
of, the date on which the primary acquisition is contracted, and
the date on which the intention or the decision to make the
primary acquisition is announced in the public domain, as
traded on the stock exchange where the maximum volume of
trading in the shares of the target company are recorded
during such period, provided such shares are frequently
traded; and
(f) the per share value computed under sub-regulation (5).
(4) In the event the offer price is incapable of being determined
under any of the parameters specified in sub-regulation (3), without
prejudice to the requirements of sub-regulation (5), the offer price shall
be the fair price of shares of the target company to be determined by
the acquirer and the manager to the open offer taking into account
valuation parameters including, book value, comparable trading
multiples, and such other parameters as are customary for valuation of
shares of such companies.
(5) In the case of an indirect acquisition and open offers under sub-
regulation (2) of Regulation 5 where,—
(a) the proportionate net asset value of the target company as a
percentage of the consolidated net asset value of the entity or
business being acquired;
(b) the proportionate sales turnover of the target company as a
percentage of the consolidated sales turnover of the entity or
business being acquired; or
(c) the proportionate market capitalization of the target company
as a percentage of the enterprise value for the entity or
business being acquired; is in excess of fifteen per cent, on the
basis of the most recent audited annual financial statements,
the acquirer shall, notwithstanding anything contained in sub-
regulation (2) or sub-regulation (3), be required to compute
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and disclose, in the letter of offer, the per share value of the
target company taken into account for the acquisition, along
with a detailed description of the methodology adopted for
such computation.
Explanation.—For the purposes of computing the percentages
referred to in clause (c) of this sub-regulation, the market capitalisation
of the target company shall be taken into account on the basis of the
volume-weighted average market price of such shares on the stock
exchange for a period of sixty trading days preceding the earlier of, the
date on which the primary acquisition is contracted, and the date on
which the intention or the decision to make the primary acquisition is
announced in the public domain, as traded on the stock exchange
where the maximum volume of trading in the shares of the target
company are recorded during such period.
(6) For the purposes of sub-regulation (2) and sub-regulation (3),
where the acquirer or any person acting in concert with him has any
outstanding convertible instruments convertible into shares of the
target company at a specific price, the price at which such instruments
are to be converted into shares, shall also be considered as a parameter
under sub-regulation (2) and sub-regulation (3).
(7) For the purposes of sub-regulation (2) and sub-regulation (3),
the price paid for shares of the target company shall include any price
paid or agreed to be paid for the shares or voting rights in, or control
over the target company, in any form whatsoever, whether stated in
the agreement for acquisition of shares or in any incidental,
contemporaneous or collateral agreement, whether termed as control
premium or as non-compete fees or otherwise.
(8) Where the acquirer has acquired or agreed to acquire whether by
himself or through or with persons acting in concert with him any
shares or voting rights in the target company during the offer period,
whether by subscription or purchase, at a price higher than the offer
price, the offer price shall stand revised to the highest price paid or
payable for any such acquisition:
Provided that no such acquisition shall be made after the
thirdworking day prior to the commencement of the tendering period
and until the expiry of the tendering period.
(9) The price parameters under sub-regulation (2) and sub-
regulation (3) may be adjusted by the acquirer in consultation with the
manager to the offer, for corporate actions such as issuances pursuant
to rights issue, bonus issue, stock consolidations, stock splits, payment
of dividend, de-mergers and reduction of capital, where the record date
for effecting such corporate actions falls prior to three working days
before the commencement of the tendering period:
Provided that no adjustment shall be made for dividend declared
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with a record date falling during such period except where the
dividend per share is more than fifty per cent higher than the
average of the dividend per share paid during the three financial
years preceding the date of the public announcement.
(10) Where the acquirer or persons acting in concert with him
acquires shares of the target company during the period of twenty-six
weeks after the tendering period at a price higher than the offer price
under these regulations, the acquirer and persons acting in concert
shall pay the difference between the highest acquisition price and the
offer price, to all the shareholders whose shares were accepted in the
open offer, within sixty days from the date of such acquisition:
Provided that this provision shall not be applicable to acquisitions
under another open offer under these regulations or pursuant to the
27 [Delisting Regulations], or open market purchases made in the

ordinary course on the stock exchanges, not being negotiated

acquisition of shares of the target company whether by way of bulk
deals, block deals or in any other form.
(11) Where the open offer is subject to a minimum level of
acceptances, the acquirer may, subject to the other provisions of this
regulation, indicate a lower price, which will not be less than the price
determined under this regulation, for acquiring all the acceptances
despite the acceptance falling short of the indicated minimum level of
acceptance, in the event the open offer does not receive the minimum
acceptance.
(12) In the case of any indirect acquisition, other than the indirect
acquisition referred in sub-regulation (2) of Regulation 5, the offer price
shall stand enhanced by an amount equal to a sum determined at the
rate of ten per cent per annum for the period between the earlier of the
date on which the primary acquisition is contracted or the date on
which the intention or the decision to make the primary acquisition is
announced in the public domain, and the date of the detailed public
statement, provided such period is more than fiveworking days.
(13) The offer price for partly paid up shares shall be computed as
the difference between the offer price and the amount due towards calls
-in-arrears including calls remaining unpaid with interest, if any,
thereon.
(14) The offer price for equity shares carrying differential voting
rights shall be determined by the acquirer and the manager to the open
offer with full disclosure of justification for the price so determined,
being set out in the detailed public statement and the letter of offer:
Provided that such price shall not be lower than the amount
determined by applying the percentage rate of premium, if any, that
the offer price for the equity shares carrying full voting rights
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represents to the price parameter computed under clause (d) of sub-

regulation 2, or as the case may be, clause (e) of sub-regulation 3,
to the volume-weighted average market price of the shares carrying
differential voting rights for a period of sixty trading days computed
on the same terms as specified in the aforesaid provisions, subject to
shares carrying full voting rights and the shares carrying differential
voting rights, both being frequently traded shares.
(15) In the event of any of the price parameters contained in this
regulation not being available or denominated in Indian rupees, the
conversion of such amount into Indian rupees shall be effected at the
exchange rate as prevailing on the date preceding the date of public
announcement and the acquirer shall set out the source of such
exchange rate in the public announcement, the detailed public
statement and the letter of offer.
(16) For purposes of clause (e) of sub-regulation (2) and sub-
regulation (4), the Board may, at the expense of the acquirer, require
valuation of the shares by an independent merchant banker other than
the manager to the open offer or an independent chartered accountant
in practice having a minimum experience of ten years.
9. Mode of payment.—(1) The offer price may be paid, —
(a) in cash;
(b) by issue, exchange or transfer of listed shares in the equity
share capital of the acquirer or of any person acting in concert;
(c) by issue, exchange or transfer of listed secured debt
instruments issued by the acquirer or any person acting in
concert with a rating not inferior to investment grade as rated
by a credit rating agency registered with the Board;
(d) by issue, exchange or transfer of convertible debt securities
entitling the holder thereof to acquire listed shares in the
equity share capital of the acquirer or of any person acting in
concert; or
(e) a combination of the mode of payment of consideration stated
in clause (a), clause (b), clause (c) and clause (d):
Provided that where any shares have been acquired or
agreed to be acquired by the acquirer and persons acting in
concert with him during the fifty-two weeks immediately
preceding the date of public announcement constitute more
than ten per cent of the voting rights in the target company
and has been paid for in cash, the open offer shall entail an
option to the shareholders to require payment of the offer price
in cash, and a shareholder who has not exercised an option in
his acceptance shall be deemed to have opted for receiving the
offer price in cash:
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Providedfurther that in case of revision in offer price the

mode of payment of consideration may be altered subject to
the condition that the component of the offer price to be paid
in cash prior to such revision is not reduced.
(2) For the purposes of clause (b), clause (d) and clause (e) of sub-
regulation (1), the shares sought to be issued or exchanged or
transferred or the shares to be issued upon conversion of other
securities, towards payment of the offer price, shall conform to the
following requirements,—
(a) suchclass of shares are listed on a stock exchange and
frequently traded at the time of the public announcement;
(b) suchclass of shares have been listed for a period of at least
two years preceding the date of the public announcement;
(c) the issuer of such class of shares has redressed at least ninety
five per cent. of the complaints received from investors by the
end of the calendar quarter immediately preceding the calendar
month in which the public announcement is made;
(d) the issuer of such class of shares has been in material
compliance with the 28 [listing regulations] for a period of at
least two years immediately preceding the date of the public
announcement:
Provided that in case where the Board is of the view that a
company has not been materially compliant with the provisions
of the 29 [listing regulations], the offer price shall be paid in
cash only;
(e) the impact of auditors' qualifications, if any, on the audited
accounts of the issuer of such shares for three immediately
preceding financial years does not exceed five per cent. of the
net profit or loss after tax of such issuer for the respective
years; and
(f) the Board has not issued any direction against the issuer of
such shares not to access the capital market or to issue fresh
shares.
(3) Where the shareholders have been provided with options to
accept payment in cash or by way of securities, or a combination
thereof, the pricing for the open offer may be different for each option
subject to compliance with minimum offer price requirements under
Regulation 8:
Provided that the detailed public statement and the letter of offer
shall contain justification for such differential pricing.
(4) In the event the offer price consists of consideration to be paid
by issuance of securities, which requires compliance with any applicable
law, the acquirer shall ensure that such compliance is completed not
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later than the commencement of the tendering period:

Provided that in case the requisite compliance is not made by
such date, the acquirer shall pay the entire consideration in cash.
(5) Where listed securities are offered as consideration, the value of
such securities shall be higher of:
(a) the average of the weekly high and low of the closing prices of
such securities quoted on the stock exchange during the six
months preceding the relevant date;
(b) the average of the weekly high and low of the closing prices of
such securities quoted on the stock exchange during the two
weeks preceding the relevant date; and
(c) the volume-weighted average market price for a period of
sixty trading days preceding the date of the public
announcement, as traded on the stock exchange where the
maximum volume of trading in the shares of the company
whose securities are being offered as consideration, are
recorded during the six-month period prior to relevant date and
the ratio of exchange of shares shall be duly certified by an
independent merchant banker (other than the manager to the
open offer) or an independent chartered accountant having a
minimum experience of ten years.
Explanation.—For the purposes of this sub-regulation, the “relevant
date” shall be the thirtieth day prior to the date on which the meeting
of shareholders is held to consider the proposed issue of shares under 30
[clause (c) of sub-section (1) of Section 62 of the Companies Act, 2013
(18 of 2013)].
10. General exemptions.—(1) The following acquisitions shall be
exempt from the obligation to make an open offer under Regulation 3
and Regulation 4 subject to fulfillment of the conditions stipulated
therefor,—
(a) acquisition pursuant to inter se transfer of shares amongst
qualifying persons, being,—
(i) immediate relatives;
(ii) persons named as promoters in the shareholding pattern
filed by the target company in terms of the 31 [listing
regulations or as the case may be, the listing agreement] or
these regulations for not less than three years prior to the
proposed acquisition;
(iii) a company, its subsidiaries, its holding company, other
subsidiaries of such holding company, persons holding not
less than fifty per cent of the equity shares of such
company, other companies in which such persons hold not
less than fifty per cent of the equity shares, and their
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subsidiaries subject to control over such qualifying persons

being exclusively held by the same persons;
[Explanation: For the purpose of this sub-clause, the
32

company shall include a body corporate, whether Indian or

foreign.]
(iv) persons acting in concert for not less than three years prior
to the proposed acquisition, and disclosed as such pursuant
to filings under the 33 [listing regulations or as the case may
be, the listing agreement];
(v) shareholders of a target company who have been persons
acting in concert for a period of not less than three years
prior to the proposed acquisition and are disclosed as such
pursuant to filings under the 34 [listing regulations or as the
case may be, the listing agreement], and any company in
which the entire equity share capital is owned by such
shareholders in the same proportion as their holdings in the
target company without any differential entitlement to
exercise voting rights in such company:
Provided that for purposes of availing of the exemption
under this clause,—
(i) If the shares of the target company are frequently
traded, the acquisition price per share shall not be
higher by more than twenty-five per cent of the
volume-weighted average market price for a period of
sixty trading days preceding the date of issuance of
notice for the proposed inter se transfer under sub-
regulation (5), as traded on the stock exchange where
the maximum volume of trading in the shares of the
target company are recorded during such period, and if
the shares of the target company are infrequently
traded, the acquisition price shall not be higher by
more than twenty-five percent of the price determined
in terms of clause (e) of sub-regulation (2) of
Regulation 8; and
(ii) the transferor and the transferee shall have complied
with applicable disclosure requirements set out in
Chapter V.
(b) acquisition in the ordinary course of business by,—
(i) an underwriter registered with the Board by way of
allotment pursuant to an underwriting agreement in terms
of the Securities and Exchange Board of India (Issue of
Capital and Disclosure Requirements) Regulations, 2009;
(ii) a stock broker registered with the Board on behalf of his
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client in exercise of lien over the shares purchased on behalf

of the client under the bye-laws of the stock exchange where
such stock broker is a member;
(iii) a merchant banker registered with the Board or a
nominated investor in the process of market making or
subscription to the unsubscribed portion of issue in terms of
Chapter XB of the Securities and Exchange Board of India
(Issue of Capital and Disclosure Requirements) Regulations,
2009;
(iv) any person acquiring shares pursuant to a scheme of
safety net in terms of Regulation 44 of the Securities and
Exchange Board of India (Issue of Capital and Disclosure
Requirements) Regulations, 2009;
(v) a merchant banker registered with the Board acting as a
stabilisingagent or by the promoter or pre-issue shareholder
in terms of Regulation 45 of the Securities and Exchange
Board of India (Issue of Capital and Disclosure
Requirements) Regulations, 2009;
(vi) by a registered market-maker of a stock exchange in
respect of shares for which he is the market maker during
the course of market making;
(vii) a Scheduled Commercial Bank, acting as an escrow agent;
and
(viii) invocation of pledge by Scheduled Commercial Banks or
Public Financial Institutions as a pledgee.
(c) acquisitions at subsequent stages, by an acquirer who has
made a public announcement of an open offer for acquiring
shares pursuant to an agreement of disinvestment, as
contemplated in such agreement:
Provided that,—
(i) both the acquirer and the seller are the same at all the
stages of acquisition; and
(ii) full disclosures of all the subsequent stages of
acquisition, if any, have been made in the public
announcement of the open offer and in the letter of offer.
(d) acquisition pursuant to a scheme,—
(i) made under Section 18 of the Sick Industrial Companies
(Special Provisions) Act, 1985 (1 of 1986) or any statutory
modification or re-enactment thereto;
(ii) of arrangement involving the target company as a
transferor company or as a transferee company, or
reconstruction of the target company, including
amalgamation, merger or demerger, pursuant to an order of
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a court 35 [or a tribunal] 36 [* * *] under any law or

regulation, Indian or foreign; or
(iii) of arrangement not directly involving the target company
as a transferor company or as a transferee company, or
reconstruction not involving the target company's
undertaking, including amalgamation, merger or demerger,
pursuant to an order of a court 37 [or a tribunal] 38 [* * *]
under any law or regulation, Indian or foreign, subject to,—
(A) the component of cash and cash equivalents in the
consideration paid being less than twenty-five per cent of
the consideration paid under the scheme; and
(B) where after implementation of the scheme of
arrangement, persons directly or indirectly holding at
least thirty-three per cent of the voting rights in the
combined entity are the same as the persons who held
the entire voting rights before the implementation of the
scheme.
39
[(da) acquisition pursuant to a resolution plan approved under
Section 31 of the Insolvency and Bankruptcy Code, 2016 (31 of
2016).]
(e) acquisition pursuant to the provisions of the Securitisation and
Reconstruction of Financial Assets and Enforcement of Security
Interest Act, 2002 (54 of 2002);
40
[(f) acquisition pursuant to the provisions of the Delisting
Regulations;]
(g) acquisition by way of transmission, succession or inheritance;
(h) acquisition of voting rights or preference shares carrying
voting rights arising out of the operation of 41 [sub-section (2)
of Section 47 of the Companies Act, 2013 (18 of 2013)].
42 [(i) Acquisition of shares by the lenders pursuant to conversion
of their debt as part of a debt restructuring 43 [* * *]
implemented in accordance with the guidelines specified by the
Reserve Bank of India:
[Provided that the conditions specified under sub-
44

regulation (6) of Regulation 158 of the Securities and Exchange

Board of India (Issue of Capital and Disclosure Requirements)
Regulations, 2018 are complied with.]]
[Explanation.—For the purpose of this clause, “lenders”
45

shall mean all scheduled commercial banks (excluding Regional

Rural Banks) and All India Financial Institutions.]
46 [(ia) 47 [* * *]
(g) applicable provisions of the Companies Act, 2013 are
complied with.]
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48 [(j) increase in voting rights arising out of the operation of sub-

section (1) of Section 106 of the Companies Act, 2013 or
pursuant to a forfeiture of shares by the target company,
undertaken in compliance with the provisions of the Companies
Act, 2013 and its articles of association.]
(2) 49
[* * *]
[(2-A) An increase in the voting rights of any shareholder beyond
50

the threshold limits stipulated in sub-regulations (1) and (2) of

Regulation 3, without the acquisition of control, pursuant to the
conversion of equity shares with superior voting rights into ordinary
equity shares, shall be exempted from the obligation to make an open
offer under Regulation 3.]
[(2-B) Any acquisition of shares or voting rights or control of the
51

target company by way of preferential issue in compliance with

Regulation 164-A of the Securities and Exchange Board of India (Issue
of Capital and Disclosure Requirements) Regulations, 2018 shall be
exempt from the obligation to make an open offer under sub-regulation
(1) of Regulation 3 and Regulation 4.
Explanation.—The above exemption from open offer shall also apply
to the target company with infrequently traded shares which is
compliant with the provisions of sub-regulations (2), (3), (4), (5),(6),
(7) and (8) of Regulation 164-A of the Securities and Exchange Board
of India (Issue of Capital and Disclosure Requirements) Regulations,
2018. The pricing of such infrequently traded shares shall be in terms
of Regulation 165 of the Securities and Exchange Board of India (Issue
of Capital and Disclosure Requirements) Regulations, 2018.]
(3) An increase in voting rights in a target company of any
shareholder beyond the limit attracting an obligation to make an open
offer under sub-regulation (1) of Regulation 3, pursuant to buy-back of
shares 52 [by the target company] shall be exempt from the obligation
to make an open offer provided such shareholder reduces his
shareholding such that his voting rights fall to below the threshold
referred to in sub-regulation (1) of Regulation 3 within ninety days
from the date 53 [of the closure of the said buy-back offer].
(4) The following acquisitions shall be exempt from the obligation to
make an open offer under sub-regulation (2) of Regulation 3,—
(a) acquisition of shares by any shareholder of a target company,
upto his entitlement, pursuant to a rights issue;
(b) acquisition of shares by any shareholder of a target company,
beyond his entitlement, pursuant to a rights issue, subject to
fulfillment of the following conditions,—
(i) the acquirer has not renounced any of his entitlements in
such rights issue; and
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(ii) the price at which the rights issue is made is not higher
than the ex-rights price of the shares of the target company,
being the sum of,—
(A) the volume weighted average market price of the shares
of the target company during a period of sixty trading
days ending on the day prior to the date of determination
of the rights issue price, multiplied by the number of
shares outstanding prior to the rights issue, divided by
the total number of shares outstanding after allotment
under the rights issue:
Provided that such volume weighted average market
price shall be determined on the basis of trading on the
stock exchange where the maximum volume of trading in
the shares of such target company is recorded during
such period; and
(B) the price at which the shares are offered in the rights
issue, multiplied by the number of shares so offered in
the rights issue divided by the total number of shares
outstanding after allotment under the rights issue:
(c) increase in voting rights in a target company of any
shareholder pursuant to buy-back of shares:
Provided that,—
(i) such shareholder has not voted in favour of the resolution
authorising the buy-back of securities under 54 [Section 68
of the Companies Act, 2013 (18 of 2013)];
(ii) in the case of a shareholder resolution, voting is by way
of postal ballot;
(iii) where a resolution of shareholders is not required for the
buy-back, such shareholder, in his capacity as a director,
or any other interested director has not voted in favour of
the resolution of the board of directors of the target
company authorising the buy-back of securities under 55
[Section 68 of the Companies Act, 2013 (18 of 2013)];
and
(iv) the increase in voting rights does not result in an
acquisition of control by such shareholder over the target
company:
Providedfurther that where the aforesaid conditions
are not met, in the event such shareholder reduces his
shareholding such that his voting rights fall below the
level at which the obligation to make an open offer would
be attracted under sub-regulation (2) of Regulation 3,
within ninety days from the date 56 [of closure of the buy-
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back offer by the target company], the shareholder shall

be exempt from the obligation to make an open offer;
(d) acquisition of shares in a target company by any person in
exchange for shares of another target company tendered
pursuant to an open offer for acquiring shares under these
regulations;
(e) acquisition of shares in a target company from state-level
financial institutions or their subsidiaries or companies
promoted by them, by promoters of the target company
pursuant to an agreement between such transferors and such
promoter;
(f) acquisition of shares in a target company from a venture
capital fund 57 [or category I Alternative Investment Fund] or a
foreign venture capital investor registered with the Board, by
promoters of the target company pursuant to an agreement
between such venture capital fund 58 [or category I Alternative
Investment Fund] or foreign venture capital investor and such
promoters.
(5) In respect of acquisitions under clause (a) of sub-regulation (1),
and clauses (e) and (f) of sub-regulation (4), the acquirer shall
intimate the stock exchanges where the shares of the target company
are listed, the details of the proposed acquisition in such form as may
be specified, at least fourworking days prior to the proposed
acquisition, and the stock exchange shall forthwith disseminate such
information to the public.
(6) In respect of any acquisition made pursuant to exemption
provided for in this regulation, the acquirer shall file a report with the
stock exchanges where the shares of the target company are listed, in
such form as may be specified not later than four working days from
the acquisition, and the stock exchange shall forthwith disseminate
such information to the public.
[(7) In respect of any acquisition of or increase in voting rights
59

pursuant to exemption provided for in clause (a) of sub-regulation (1),

sub-clause (iii) of clause (d) of sub-regulation (1), clause (h) of sub-
regulation (1), sub-regulation (2), sub-regulation (3) and clause (c) of
sub-regulation (4), clauses (a), (b) and (f) of sub-regulation (4), the
acquirer shall, within twenty-one working days of the date of
acquisition, submit a report in such form as may be specified along
with supporting documents to the Board giving all details in respect of
acquisitions, along with a non-refundable fee of rupees one lakh fifty
thousand by way of direct credit into the bank account through
NEFT/RTGS/IMPS or online payment using the SEBI Payment Gateway
or any other mode as may be specified by the Board from time to
time.]
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Explanation.—For the purposes of sub-regulation (5), sub-regulation

(6) and sub-regulation (7) in the case of convertible securities, the date
of the acquisition shall be the date of conversion of such securities.
11. Exemptions by the Board.—(1) The Board may for reasons
recorded in writing, grant exemption from the obligation to make an
open offer for acquiring shares under these regulations subject to such
conditions as the Board deems fit to impose in the interests of investors
in securities and the securities market.
(2) The Board may for reasons recorded in writing, grant a relaxation
from strict compliance with any procedural requirement under Chapter
III and Chapter IV subject to such conditions as the Board deems fit to
impose in the interests of investors in securities and the securities
market on being satisfied that,—
(a) the target company is a company in respect of which the
Central Government or State Government or any other
regulatory authority has superseded the board of directors of
the target company and has appointed new directors under any
law for the time being in force, if,—
(i) such board of directors has formulated a plan which
provides for transparent, open, and competitive process for
acquisition of shares or voting rights in, or control over the
target company to secure the smooth and continued
operation of the target company in the interests of all
stakeholders of the target company and such plan does not
further the interests of any particular acquirer;
(ii) the conditions and requirements of the competitive process
are reasonable and fair;
(iii) the process adopted by the board of directors of the target
company provides for details including the time when the
open offer for acquiring shares would be made, completed
and the manner in which the change in control would be
effected; and
(b) the provisions of Chapter III and Chapter IV are likely to act
as impediment to implementation of the plan of the target
company and exemption from strict compliance with one or
more of such provisions is in public interest, the interests of
investors in securities and the securities market.
(3) For seeking exemption under sub-regulation (1), the acquirer
shall, and for seeking relaxation under sub-regulation (2) the target
company shall file an application with the Board, supported by a duly
sworn affidavit, giving details of the proposed acquisition and the
grounds on which the exemption has been sought.
60
[(4) The acquirer or the target company, as the case may be, shall
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along with the application referred to under sub-regulation (3) pay a

non-refundable fee of rupees five lakh, by way of direct credit into the
bank account through NEFT/RTGS/IMPS or online payment using the
SEBI Payment Gateway or any other mode as may be specified by the
Board from time to time.]
(5) The Board may after affording reasonable opportunity of being
heard to the applicant and after considering all the relevant facts and
circumstances, pass a reasoned order either granting or rejecting the
exemption or relaxation sought as expeditiously as possible:
Provided that the Board may constitute a panel of experts to
which an application for an exemption under sub-regulation (1) may,
if considered necessary, be referred to make recommendations on
the application to the Board.
(6) The order passed under sub-regulation (5) shall be hosted by the
Board on its official website.
CHAPTER III
OPEN OFFER PROCESS
12. Manager to the open offer.—(1) Prior to making a public
announcement, the acquirer shall appoint a merchant banker registered
with the Board, who is not an associate of the acquirer, as the manager
to the open offer.
Explanation.—For the purposes of this regulation the term
“associate. has the same meaning as in the Securities and Exchange
Board of India (Merchant Bankers) Regulations, 1992.
(2) The public announcement of the open offer for acquiring shares
required under these regulations shall be made by the acquirer through
such manager to the open offer.
13. Timing.—(1) The public announcement referred to in Regulation
3 and Regulation 4 shall be made in accordance with Regulation 14 and
Regulation 15, on the date of agreeing to acquire shares or voting
rights in, or control over the target company.
(2) Such public announcement,—
(a) in the case of market purchases, shall be made prior to
placement of the purchase order with the stock broker to
acquire the shares, that would take the entitlement to voting
rights beyond the stipulated thresholds;
(b) pursuant to an acquirer acquiring shares or voting rights in, or
control over the target company upon converting convertible
securities without a fixed date of conversion or upon conversion
of depository receipts for the underlying shares of the target
company shall be made on the same day as the date of
exercise of the option to convert such securities into shares of
the target company;
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(c) pursuant to an acquirer acquiring shares or voting rights in, or

control over the target company upon conversion of convertible
securities with a fixed date of conversion shall be made on the
second working day preceding the scheduled date of conversion
of such securities into shares of the target company;
(d) pursuant to a disinvestment shall be made on the same day
as the date of executing the agreement for acquisition of
shares or voting rights in or control over the target company;
(e) in the case of indirect acquisition of shares or voting rights in,
or control over the target company where none of the
parameters referred to in sub-regulation (2) of Regulation 5 are
met, may be made at any time within four working days from
the earlier of, the date on which the primary acquisition is
contracted, and the date on which the intention or the decision
to make the primary acquisition is announced in the public
domain;
(f) in the case of indirect acquisition of shares or voting rights in,
or control over the target company where any of the
parameters referred to in sub-regulation (2) of Regulation 5 are
met shall be made on the earlier of, the date on which the
primary acquisition is contracted, and the date on which the
intention or the decision to make the primary acquisition is
announced in the public domain;
(g) pursuant to an acquirer acquiring shares or voting rights in, or
control over the target company, under preferential issue, shall
be made on the date on which 61 [the board of directors of the
target company authorises such preferential issue.];
(h) the public announcement pursuant to an increase in voting
rights consequential to a buy-back not qualifying for exemption
under Regulation 10, shall be made not later than the ninetieth
day from the date of 62 [closure of the buy-back offer by the
target company].;
(i) the public announcement pursuant to any acquisition of shares
or voting rights in or control over the target company where
the specific date on which title to such shares, voting rights or
control is acquired is beyond the control of the acquirer, shall
be made not later than two working days from the date of
receipt of intimation of having acquired such title.
[(2A) Notwithstanding anything contained in sub-regulation (2), a
63

public announcement referred to in Regulation 3 and Regulation 4 for a

proposed acquisition of shares or voting rights in or control over the
target company through a combination of,—
(i) an agreement and any one or more modes of acquisition
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referred to in sub-regulation (2) of Regulation 13, or

(ii) any one or more modes of acquisition referred in clause (a) to
(i) of sub-regulation (2) of Regulation 13,
shall be made on the date of first such acquisition, provided the
acquirer discloses in the public announcement the details of the
proposed subsequent acquisition.]
(3) The public announcement made under Regulation 6 shall be
made on the same day as the date on which the acquirer takes the
decision to voluntarily make a public announcement of an open offer for
acquiring shares of the target company.
(4) Pursuant to the public announcement made under sub-regulation
(1) and sub-regulation (3), a detailed public statement shall be
published by the acquirer through the manager to the open offer in
accordance with Regulation 14 and Regulation 15, not later than five
working days of the public announcement:
Provided that the detailed public statement pursuant to a public
announcement made under clause (e) of sub-regulation (2) shall be
made not later than five working days of the completion of the
primary acquisition of shares or voting rights in, or control over the
company or entity holding shares or voting rights in, or control over
the target company.
Explanation.— It is clarified that in the event the acquirer does
not succeed in acquiring the ability to exercise or direct the exercise
of voting rights in, or control over the target company, the acquirer
shall not be required to make a detailed public statement of an open
offer for acquiring shares under these regulations.
14. Publication.—(1) The public announcement shall be sent to all
the stock exchanges on which the shares of the target company are
listed, and the stock exchanges shall forthwith disseminate such
information to the public.
(2) A copy of the public announcement shall be sent to the Board
and to the target company at its registered office within one working
day of the date of the public announcement.
(3) The detailed public statement pursuant to the public
announcement referred to in sub-regulation (4) of Regulation 13 shall
be published in all editions of any one English national daily with wide
circulation, any one Hindi national daily with wide circulation, and any
one regional language daily with wide circulation at the place where the
registered office of the target company is situated and one regional
language daily at the place of the stock exchange where the maximum
volume of trading in the shares of the target company are recorded
during the sixty trading days preceding the date of the public
announcement.
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(4) Simultaneously with publication of such detailed public

statement in the newspapers, a copy of the same shall be sent to,—
(i) the Board through the manager to the open offer,
(ii) all the stock exchanges on which the shares of the target
company are listed, and the stock exchanges shall forthwith
disseminate such information to the public,
(iii) the target company at its registered office, and the target
company shall forthwith circulate it to the members of its
board.
15. Contents.—(1) The public announcement shall contain such
information as may be specified, including the following,—
(a) name and identity of the acquirer and persons acting in
concert with him;
(b) name and identity of the sellers, if any;
(c) nature of the proposed acquisition such as purchase of shares
or allotment of shares, or any other means of acquisition of
shares or voting rights in, or control over the target company;
(d) the consideration for the proposed acquisition that attracted
the obligation to make an open offer for acquiring shares, and
the price per share, if any;
(e) the offer price, and mode of payment of consideration; 64
[* *
*]
(f) offer size, and conditions as to minimum level of acceptances,
65 [if any; and]

66
[(g) intention of the acquirer to either delist the target company
or retain the listing of the target company. In case of proposed
delisting under Regulation 5-A, the proposed open offer price
and indicative price as required under Regulation 5-A shall be
disclosed along with an explanation setting out the rationale
and basis for justifying the indicative price.]
(2) The detailed public statement pursuant to the public
announcement shall contain such information as may be specified in
order to enable shareholders to make an informed decision with
reference to the open offer.
(3) The public announcement of the open offer, the detailed public
statement, and any other statement, advertisement, circular, brochure,
publicity material or letter of offer issued in relation to the acquisition of
shares under these regulations shall not omit any relevant information,
or contain any misleading information.
16. Filing of letter of offer with the Board.—(1) Within five
working days from the date of the detailed public statement made
under sub-regulation (4) of Regulation 13, the acquirer shall, through
the manager to the open offer, file with the Board, a draft of the letter
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of offer containing such information as may be specified along with a

non-refundable fee, as per the following scale, 67 [by way of direct credit
in the bank account through NEFT/RTGS/IMPS or 68 [online payment
using the SEBI Payment Gateway or any other mode as may be
specified by the Board from time to time],—
69
[
Sl. Consideration payable Fee (Rs.)
No. under the Open Offer
a. Upto ten crore rupees. Five lakh rupees (Rs. 5,00,000)
b. More than ten crore 0.5 per cent of the offer size
rupees, but less than or
equal to one thousand
crore rupees.
c. More than one thousand Five crore rupees (Rs.
crore rupees. 5,00,00,000) plus 0.125 per cent
of the portion of the offer size in
excess of one thousand crore
rupees (1000,00,00,000).
]
(2) The consideration payable under the open offer shall be
calculated at the offer price, assuming full acceptance of the open offer,
and in the event the open offer is subject to differential pricing, shall be
computed at the highest offer price, irrespective of manner of payment
of the consideration:
Provided that in the event of consideration payable under the
open offer being enhanced owing to a revision to the offer price or
offer size the fees payable shall stand revised accordingly, and shall
be paid within five working days from the date of such revision.
(3) The manager to the open offer shall provide soft copies of the
public announcement, the detailed public statement and the draft letter
of offer in accordance with such specifications as may be specified, and
the Board shall upload the same on its website.
(4) The Board shall give its comments on the draft letter of offer as
expeditiously as possible but not later than fifteen working days of the
receipt of the draft letter of offer and in the event of no comments
being issued by the Board within such period, it shall be deemed that
the Board does not have comments to offer:
Provided that in the event the Board has sought clarifications or
additional information from the manager to the open offer, the
period for issuance of comments shall be extended to the fifth
working day from the date of receipt of satisfactory reply to the
clarification or additional information sought.
Providedfurther that in the event the Board specifies any
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changes, the manager to the open offer and the acquirer shall carry
out such changes in the letter of offer before it is dispatched to the
shareholders.
(5) In the case of competing offers, the Board shall provide its
comments on the draft letter of offer in respect of each competing offer
on the same day.
(6) In the event the disclosures in the draft letter of offer are
inadequate the Board may call for a revised letter of offer and shall deal
with the revised letter of offer in accordance with sub-regulation (4).
17. Provision of escrow.—(1) Not later than two working days
prior to the date of the detailed public statement of the open offer for
acquiring shares, the acquirer shall create an escrow account towards
security for performance of his obligations under these regulations, and
deposit in escrow account such aggregate amount as per the following
scale:
Sl. Consideration payable Escrow Amount
No. under the Open Offer
a. On the first five hundred an amount equal to twenty-five
crore rupees per cent of the consideration
b. On the balance an additional amount equal to ten
consideration per cent of the balance
consideration
Provided that where an open offer is made conditional upon
minimum level of acceptance,hundred percent of the consideration
payable in respect of minimum level of acceptance or fifty per cent of
the consideration payable under the open offer, whichever is higher,
shall be deposited in cash in the escrow account:
[Provided further that in case of indirect acquisitions where
70

public announcement has been made in terms of clause (e) of sub-

regulation (2) of Regulation 13 of these regulations, an amount
equivalent to hundred per cent of the consideration payable in the
open offer shall be deposited in the escrow account.]
(2) The consideration payable under the open offer shall be
computed as provided for in sub-regulation (2) of Regulation 16 and in
the event of an upward revision of the offer price or of the offer size,
the value of the escrow amount shall be computed on the revised
consideration calculated at such revised offer price, and the additional
amount shall be brought into the escrow account prior to effecting such
revision.
(3) The escrow account referred to in sub-regulation (1) may be in
the form of,—
(a) cash deposited with any scheduled commercial bank;
(b) bank guarantee issued in favour of the manager to the open
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offer by any scheduled commercial bank; or

(c) deposit of frequently traded and freely transferable equity
shares or other freely transferable securities with appropriate
margin:
Provided that securities sought to be provided towards escrow
account under clause (c) shall be required to conform to the
requirements set out in sub-regulation (2) of Regulation 9:
[Provided further that the deposit of securities shall not be
71

permitted in respect of indirect acquisitions where public

announcement has been made in terms of clause (e) of sub-
regulation (2) of Regulation 13 of these regulations.]
[Explanation: The cash component of the escrow account as
72

referred to in clause (a) above may be maintained in an interest

bearing account, subject to the merchant banker ensuring that the
funds are available at the time of making payment to the
shareholders.]
(4) In the event of the escrow account being created by way of a
bank guarantee or by deposit of securities, the acquirer shall also
ensure that at least one per cent of the total consideration payable is
deposited in cash with a scheduled commercial bank as a part of the
escrow account.
(5) For such part of the escrow account as is in the form of a cash
deposit with a scheduled commercial bank, the acquirer shall while
opening the account, empower the manager to the open offer to
instruct the bank to issue a banker's cheque or demand draft or to
make payment of the amounts lying to the credit of the escrow
account, in accordance with requirements under these regulations.
(6) For such part of the escrow account as is in the form of a bank
guarantee, such bank guarantee shall be in favour of the manager to
the open offer and shall be kept valid throughout the offer period and
for an additional period of thirty days after completion of payment of
consideration to shareholders who have tendered their shares in
acceptance of the open offer.
(7) For such part of the escrow account as is in the form of
securities, the acquirer shall empower the manager to the open offer to
realise the value of such escrow account by sale or otherwise, and in
the event there is any shortfall in the amount required to be maintained
in the escrow account, the manager to the open offer shall be liable to
make good such shortfall.
(8) The manager to the open offer shall not release the escrow
account until the expiry of thirty days from the completion of payment
of consideration to shareholders who have tendered their shares in
acceptance of the open offer, save and except for transfer of funds to
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the special escrow account as required under Regulation 21.

(9) In the event of non-fulfillment of obligations under these
regulations by the acquirer the Board may direct the manager to the
open offer to forfeit the escrow account or any amounts lying in the
special escrow account, either in full or in part.
(10) The escrow account deposited with the bank in cash shall be
released only in the following manner,—
(a) the entire amount to the acquirer upon withdrawal of offer in
terms of Regulation 23 as certified by the manager to the open
offer:
Provided that in the event the withdrawal is pursuant to
clause (c) of sub-regulation (1) of Regulation 23, the manager
to the open offer shall release the escrow account upon receipt
of confirmation of such release from the Board;
(b) for transfer of an amount not exceeding ninety per cent of the
escrow account, to the special escrow account in accordance
with Regulation 21;
(c) to the acquirer, the balance of the escrow account after
transfer of cash to the special escrow account, on the expiry of
thirty days from the completion of payment of consideration to
shareholders who have tendered their shares in acceptance of
the open offer, as certified by the manager to the open offer;
(d) the entire amount to the acquirer upon the expiry of thirty
days from the completion of payment of consideration to
shareholders who have tendered their shares in acceptance of
the open offer, upon certification by the manager to the open
offer, where the open offer is for exchange of shares or other
secured instruments;
(e) the entire amount to the manager to the open offer, in the
event of forfeiture for non-fulfillment of any of the obligations
under these regulations, for distribution in the following
manner, after deduction of expenses, if any, of registered
market intermediaries associated with the open offer,—
(i) one third of the escrow account to the target company;
(ii) one third of the escrow account to the Investor Protection
and Education Fund established under the Securities and
Exchange Board of India (Investor Protection and Education
Fund) Regulations, 2009; and
(iii) one third of the escrow account to be distributed pro-rata
among the shareholders who have accepted the open offer.
18. Other procedures.—(1) Simultaneously with the filing of the
draft letter of offer with the Board under sub-regulation (1) of
Regulation 16, the acquirer shall send a copy of the draft letter of offer
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to the target company at its registered office address and to all stock
exchanges where the shares of the target company are listed.
(2) The letter of offer shall be dispatched to the shareholders whose
names appear on the register of members of the target company as of
the identified date, not later than seven working days from the receipt
of comments from the Board or where no comments are offered by the
Board, within seven working days from the expiry of the period
stipulated in sub-regulation (4) of Regulation 16:
73
[Explanation:
(i) Letter of offer may also be dispatched through electronic mode
in accordance with the provisions of Companies Act, 2013.
(ii) On receipt of a request from any shareholder to receive a copy
of the letter of offer in physical format, the same shall be
provided.
(iii) The aforesaid shall be disclosed in the letter of offer.]
Provided that where local laws or regulations of any jurisdiction
outside India may expose the acquirer or the target company to
material risk of civil, regulatory or criminal liabilities in the event the
letter of offer in its final form were to be sent without material
amendments or modifications into such jurisdiction, and the
shareholders resident in such jurisdiction hold shares entitling them
to less than five per cent of the voting rights of the target company,
the acquirer may refrain from dispatch of the letter of offer into such
jurisdiction:
Provided further that every person holding shares, regardless of
whether he held shares on the identified date or has not received the
letter of offer, shall be entitled to tender such shares in acceptance
of the open offer.
(3) Simultaneously with the dispatch of the letter of offer in terms of
sub-regulation (2), the acquirer shall send the letter of offer to the
custodian of shares underlying depository receipts, if any, of the target
company.
(4) Irrespective of whether a competing offer has been made, an
acquirer may make upward revisions to the offer price, and subject to
the other provisions of these regulations, to the number of shares
sought to be acquired under the open offer, at any time prior to the
commencement of the last 74 [one working day] before the
commencement of the tendering period.
(5) In the event of any revision of the open offer, whether by way of
an upward revision in offer price, or of the offer size, the acquirer shall,
—
(a) make corresponding increases to the amount kept in escrow
account under Regulation 17 prior to such revision;
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(b) make an announcement in respect of such revisions in all the

newspapers in which the detailed public statement pursuant to
the public announcement was made; and
(c) simultaneously with the issue of such an announcement,
inform the Board, all the stock exchanges on which the shares
of the target company are listed, and the target company at its
registered office.
(6) The acquirer shall disclose during the offer period every
acquisition made by the acquirer or persons acting in concert with him
of any shares of the target company in such form as may be specified,
to each of the stock exchanges on which the shares of the target
company are listed and to the target company at its registered office
within twenty-four hours of such acquisition, and the stock exchanges
shall forthwith disseminate such information to the public:
Provided that the acquirer and persons acting in concert with him
shall not acquire or sell any shares of the target company during the
period between three working days prior to the commencement of
the tendering period and until the expiry of the tendering period.
[(6-A)The acquirer shall facilitate tendering of shares by the
75

shareholders and settlement of the same, through the stock exchange

mechanism as specified by the Board.]
(7) The acquirer shall issue an advertisement in such form as may
be specified, one working day before the commencement of the
tendering period, announcing the schedule of activities for the open
offer, the status of statutory and other approvals, if any, whether for
the acquisition attracting the obligation to make an open offer under
these regulations or for the open offer, unfulfilled conditions, if any, and
their status, the procedure for tendering acceptances and such other
material detail as may be specified:
Provided that such advertisement shall be,—
(a) published in all the newspapers in which the detailed public
statement pursuant to the public announcement was made;
and
(b) simultaneously sent to the Board, all the stock exchanges on
which the shares of the target company are listed, and the
target company at its registered office.
(8) The tendering period shall start not later than twelve working
days from date of receipt of comments from the Board under sub-
regulation (4) of Regulation 16 and shall remain open for ten working
days.
(9) Shareholders who have tendered shares in acceptance of the
open offer shall not be entitled to withdraw such acceptance during the
tendering period.
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(10) The acquirer shall, within ten working days from the last date of
the tendering period, complete all requirements under these
regulations and other applicable law relating to the open offer including
payment of consideration to the shareholders who have accepted the
open offer.
(11) The acquirer shall be responsible to pursue all statutory
approvals required by the acquirer in order to complete the open offer
without any default, neglect or delay:
Provided that where the acquirer is unable to make the payment
to the shareholders who have accepted the open offer within such
period owing to non-receipt of statutory approvals required by the
acquirer, the Board may, where it is satisfied that such non-receipt
was not attributable to any willful default, failure or neglect on the
part of the acquirer to diligently pursue such approvals, grant
extension of time for making payments, subject to the acquirer
agreeing to pay interest to the shareholders for the delay at such
rate as may be specified:
Provided further that where the statutory approval extends to
some but not all shareholders, the acquirer shall have the option to
make payment to such shareholders in respect of whom no statutory
approvals are required in order to complete the open offer.
[(11-A) Without prejudice to sub-regulation (11), in case the
76

acquirer is unable to make payment to the shareholders who have

accepted the open offer within such period, the acquirer shall pay
interest for the period of delay to all such shareholders whose shares
have been accepted in the open offer, at the rate of ten per cent per
annum:
Provided that in case the delay was not attributable to any act of
omission or commission of the acquirer, or due to the reasons or
circumstances beyond the control of acquirer, the Board may grant
waiver from the payment of interest:
Provided further that the payment of interest would be without
prejudice to the Board taking any action under Regulation 32 of
these regulation or under the Act.]
(12)(a) The acquirer shall issue a post offer advertisement in such
form as may be specified within five working days after the offer period,
giving details including aggregate number of shares tendered,
accepted, date of payment of consideration.
(b) Such advertisement shall be,—
(i) published in all the newspapers in which the detailed public
statement pursuant to the public announcement was made;
and
(ii) simultaneously sent to the Board, all the stock exchanges on
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which the shares of the target company are listed, and the
target company at its registered office.
19. Conditional offer.—(1) An acquirer may make an open offer
conditional as to the minimum level of acceptance:
Provided that where the open offer is pursuant to an agreement,
such agreement shall contain a condition to the effect that in the
event the desired level of acceptance of the open offer is not
received the acquirer shall not acquire any shares under the open
offer and the agreement attracting the obligation to make the open
offer shall stand rescinded.
(2) Where an open offer is made conditional upon minimum level of
acceptances, the acquirer and persons acting in concert with him shall
not acquire, during the offer period, any shares in the target company
except under the open offer and any underlying agreement for the sale
of shares of the target company pursuant to which the open offer is
made.
20. Competing offers.—(1) Upon a public announcement of an
open offer for acquiring shares of a target company being made, any
person, other than the acquirer who has made such public
announcement, shall be entitled to make a public announcement of an
open offer within fifteen working days of the date of the detailed public
statement made by the acquirer who has made the first public
announcement.
(2) The open offer made under sub-regulation (1) shall be for such
number of shares which, when taken together with shares held by such
acquirer along with persons acting in concert with him, shall be at least
equal to the holding of the acquirer who has made the first public
announcement,including the number of shares proposed to be acquired
by him under the offer and any underlying agreement for the sale of
shares of the target company pursuant to which the open offer is made.
(3) Notwithstanding anything contained in these regulations, an
open offer made within the period referred to in sub-regulation (1) shall
not be regarded as a voluntary open offer under Regulation 6, and the
provisions of these regulations shall apply accordingly.
(4) Every open offer made under sub-regulation (1) and the open
offer first made shall be regarded as competing offers for purposes of
these regulations.
(5) No person shall be entitled to make a public announcement of an
open offer for acquiring shares, or enter into any transaction that would
attract the obligation to make a public announcement of an open offer
for acquiring shares under these regulations, after the period of fifteen
working days referred to in sub-regulation (1) and until the expiry of
the offer period for such open offer.
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(6) Unless the open offer first made is an open offer conditional as to
the minimum level of acceptances, no acquirer making a competing
offer may be made conditional as to the minimum level of acceptances.
(7) No person shall be entitled to make a public announcement of an
open offer for acquiring shares, or enter into any transaction that would
attract the obligation to make a public announcement of an open offer
under these regulations until the expiry of the offer period where,—
(a) the open offer is for acquisition of shares pursuant to
disinvestment, in terms of clause (d) of sub-regulation (2) of
Regulation 13; or
(b) the open offer is pursuant to a relaxation from strict
compliance with the provisions of Chapter III or Chapter IV
granted by the Board under sub-regulation (2) of Regulation
11.
(8) The schedule of activities and the tendering period for all
competing offers shall be carried out with identical timelines and the
last date for tendering shares in acceptance of the every competing
offer shall stand revised to the last date for tendering shares in
acceptance of the competing offer last made.
(9) Upon the public announcement of a competing offer, an acquirer
who had made a preceding competing offer shall be entitled to revise
the terms of his open offer provided the revised terms are more
favourable to the shareholders of the target company:
Provided that the acquirers making the competing offers shall be
entitled to make upward revisions of the offer price at any time up to
77
[one working day] prior to the commencement of the tendering
period.
(10) Except for variations made under this regulation, all the
provisions of these regulations shall apply to every competing offer.
21. Payment of consideration.—(1) For the amount of
consideration payable in cash, the acquirer shall open a special escrow
account with a banker to an issue registered with the Board and deposit
therein, such sum as would, together with cash transferred under
clause (b) of sub-regulation (10) of Regulation 17, make up the entire
sum due and payable to the shareholders as consideration payable
under the open offer, and empower the manager to the offer to operate
the special escrow account on behalf of the acquirer for the purposes
under these regulations.
(2) Subject to provisos to sub-regulation (11) of Regulation 18, the
acquirer shall complete payment of consideration whether in the form
of cash, or as the case may be, by issue, exchange or transfer of
securities, to all shareholders who have tendered shares in acceptance
of the open offer, within ten working days of the expiry of the tendering
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period.
(3) Unclaimed balances, if any, lying to the credit of the special
escrow account referred to in sub-regulation (1) at the end of seven
years from the date of deposit thereof, shall be transferred to the
Investor Protection and Education Fund established under the
Securities and Exchange Board of India (Investor Protection and
Education Fund) Regulations, 2009.
22. Completion of acquisition.—(1) The acquirer shall not
complete the acquisition of shares or voting rights in, or control over,
the target company, whether by way of subscription to shares or a
purchase of shares attracting the obligation to make an open offer for
acquiring shares, until the expiry of the offer period:
[Provided that in case of an offer made under sub-regulation (1)
78

of Regulation 20 of these regulations, pursuant to a preferential

allotment, the offer shall be completed within the period as provided
under sub-regulation (1) of Regulation 170 of the Securities and
Exchange Board of India (Issue of Capital and Disclosure
requirements) Regulations, 2018, subject to the nonobstante clause
in sub-regulation (4) of Regulation 7 of these regulations:]
[Provided further that in case of a delisting offer made under
79

Regulation 5-A, the acquirer shall complete the acquisition of shares

attracting the obligation to make an offer for acquiring shares in
terms of 80 [sub-regulation (1) of Regulation 3, Regulation 4 or
Regulation 5], only after making the public announcement regarding
the success of the delisting proposal made in terms of 81 [sub-
regulation (4) of Regulation 17 of the Delisting Regulations].]
(2) Notwithstanding anything contained in sub-regulation (1),
subject to the acquirer depositing in the escrow account under
Regulation 17, cash of an amount equal to 82 [the entire] consideration
payable under the open offer assuming full acceptance of the open
offer, the parties to such agreement may after the expiry of twenty-one
working days from the date of detailed public statement, act upon the
agreement and the acquirer may complete the acquisition of shares or
voting rights in, or control over the target company as contemplated.
[Provided that in case of proportionate reduction of the shares or
83

voting rights to be acquired in accordance with the relevant provision

under sub-regulation (4) of Regulation 7, the acquirer shall undertake
the completion of the scaled down acquisition of shares or voting rights
in the target company.]
[(2-A) Notwithstanding anything contained in sub-regulation (1),
84

an acquirer may acquire shares of the target company through

preferential issue or through the stock exchange settlement process, 85
[* * *] subject to,—
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(i) such shares being kept in an escrow account,

(ii) the acquirer not exercising any voting rights over such shares
kept in the escrow account:
Provided that such shares may be transferred to the account
of the acquirer, subject to the acquirer complying with
requirements specified in sub-regulation (2).]
(3) The acquirer shall complete the acquisitions contracted under
any agreement attracting the obligation to make an open offer not later
than twenty-six weeks from the expiry of the offer period:
Provided that in the event of any extraordinary and supervening
circumstances rendering it impossible to complete such acquisition
within such period, the Board may for reasons to be published, may
grant an extension of time by such period as it may deem fit in the
interests of investors in securities and the securities market.
23. Withdrawal of open offer.—(1) An open offer for acquiring
shares once made shall not be withdrawn except under any of the
following circumstances,—
(a) statutory approvals required for the open offer or for effecting
the acquisitions attracting the obligation to make an open offer
under these regulations having been finally refused, subject to
such requirements for approval having been specifically
disclosed in the detailed public statement and the letter of
offer;
(b) the acquirer, being a natural person, has died;
(c) any condition stipulated in the agreement for acquisition
attracting the obligation to make the open offer is not met for
reasons outside the reasonable control of the acquirer, and
such agreement is rescinded, subject to such conditions having
been specifically disclosed in the detailed public statement and
the letter of offer; or
(d) such circumstances as in the opinion of the Board, merit
withdrawal.
Explanation.—For the purposes of clause (d) of sub-regulation (1),
the Board shall pass a reasoned order permitting withdrawal, and
such order shall be hosted by the Board on its official website.
[Provided that an acquirer shall not withdraw an open offer
86

pursuant to a public announcement made under clause (g) of sub-

regulation (2) of Regulation 13, even if the proposed acquisition
through the preferential issue is not successful.]
(2) In the event of withdrawal of the open offer, the acquirer shall
through the manager to the open offer, within two working days,—
(a) make an announcement in the same newspapers in which the
public announcement of the open offer was published,
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providing the grounds and reasons for withdrawal of the open

offer; and
(b) simultaneously with the announcement, inform in writing to,—
(i) the Board;
(ii) all the stock exchanges on which the shares of the target
company are listed, and the stock exchanges shall forthwith
disseminate such information to the public; and
(iii) the target company at its registered office.
CHAPTER IV
OTHER OBLIGATIONS
24. Directors of the target company.—(1) During the offer period,
no person representing the acquirer or any person acting in concert
with him shall be appointed as director on the board of directors of the
target company, whether as an additional director or in a casual
vacancy:
Provided that after an initial period of fifteen working days from
the date of detailed public statement, appointment of persons
representing the acquirer or persons acting in concert with him on
the board of directors may be effected in the event the acquirer
deposits in cash in the escrow account referred to in Regulation 17,
87 [the entire] consideration payable under the open offer:

Provided further that where the acquirer has specified conditions

to which the open offer is subject in terms of clause (c) of sub-
regulation (1) of Regulation 23, no director representing the acquirer
may be appointed to the board of directors of the target company
during the offer period unless the acquirer has waived or attained
such conditions and complies with the requirement of depositing
cash in the escrow account.
(2) Where an open offer is made conditional upon minimum level of
acceptances, the acquirer and persons acting in concert shall,
notwithstanding anything contained in these regulations, and
regardless of the size of the cash deposited in the escrow account
referred to Regulation 17, not be entitled to appoint any director
representing the acquirer or any person acting in concert with him on
the board of directors of the target company during the offer period.
(3) During the pendency of competing offers, notwithstanding
anything contained in these regulations, and regardless of the size of
the cash deposited in the escrow account referred to in Regulation 17,
by any acquirer or person acting in concert with him, there shall be no
induction of any new director to the board of directors of the target
company:
Provided that in the event of death or incapacitation of any
director, the vacancy arising therefrom may be filled by any person
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subject to approval of such appointment by shareholders of the

target company by way of a postal ballot.
(4) In the event the acquirer or any person acting in concert is
already represented by a director on the board of the target company,
such director shall not participate in any deliberations of the board of
directors of the target company or vote on any matter in relation to the
open offer.
25. Obligations of the acquirer.—(1) Prior to making the public
announcement of an open offer for acquiring shares under these
regulations, the acquirer shall ensure that firm financial arrangements
have been made for fulfilling the payment obligations under the open
offer and that the acquirer is able to implement the open offer, subject
to any statutory approvals for the open offer that may be necessary.
(2) In the event the acquirer has not declared an intention in the
detailed public statement and the letter of offer to alienate any material
assets of the target company or of any of its subsidiaries whether by
way of sale, lease, encumbrance or otherwise outside the ordinary
course of business, the acquirer, where he has acquired control over the
target company, shall be debarred from causing such alienation for a
period of two years after the offer period:
Provided that in the event the target company or any of its
subsidiaries is required to so alienate assets despite the intention to
alienate not having been expressed by the acquirer, such alienation
shall require a special resolution passed by shareholders of the
target company, by way of a postal ballot and the notice for such
postal ballot shall inter alia contain reasons as to why such alienation
is necessary.
(3) The acquirer shall ensure that the contents of the public
announcement, the detailed public statement, the letter of offer and
the post-offer advertisement are true, fair and adequate in all material
aspects and not misleading in any material particular, and are based on
reliable sources, and state the source wherever necessary.
(4) The acquirer and persons acting in concert with him shall not sell
shares of the target company held by them, during the offer period.
(5) The acquirer and persons acting in concert with him shall be
jointly and severally responsible for fulfillment of applicable obligations
under these regulations.
26. Obligations of the target company.—(1) Upon a public
announcement of an open offer for acquiring shares of a target
company being made, the board of directors of such target company
shall ensure that during the offer period, the business of the target
company is conducted in the ordinary course consistent with past
practice.
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(2) During the offer period, unless the approval of shareholders of

the target company by way of a special resolution by postal ballot is
obtained, the board of directors of either the target company or any of
its subsidiaries shall not,—
(a) alienate any material assets whether by way of sale, lease,
encumbrance or otherwise or enter into any agreement therefor
outside the ordinary course of business;
(b) effect any material borrowings outside the ordinary course of
business;
(c) issue or allot any authorised but unissued securities entitling
the holder to voting rights:
Provided that the target company or its subsidiaries may,—
(i) issue or allot shares upon conversion of convertible
securities issued prior to the public announcement of the
open offer, in accordance with pre-determined terms of
such conversion;
(ii) issue or allot shares pursuant to any public issue in
respect of which the red herring prospectus has been filed
with the Registrar of Companies prior to the public
announcement of the open offer; or
(iii) issue or allot shares pursuant to any rights issue in
respect of which the record date has been announced
prior to the public announcement of the open offer;
(d) implement any buy-back of shares or effect any other change
to the capital structure of the target company;
(e) enter into, amend or terminate any material contracts to
which the target company or any of its subsidiaries is a party,
outside the ordinary course of business, whether such contract
is with a related party, within the meaning of the term under
applicable accounting principles, or with any other person; and
(f) accelerate any contingent vesting of a right of any person to
whom the target company or any of its subsidiaries may have
an obligation, whether such obligation is to acquire shares of
the target company by way of employee stock options or
otherwise.
(3) In any general meeting of a subsidiary of the target company in
respect of the matters referred to in sub-regulation (2), the target
company and its subsidiaries, if any, shall vote in a manner consistent
with the special resolution passed by the shareholders of the target
company.
(4) The target company shall be prohibited from fixing any record
date for a corporate action on or after the third working day prior to the
commencement of the tendering period and until the expiry of the
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tendering period.
(5) The target company shall furnish to the acquirer within two
working days from the identified date, a list of shareholders as per the
register of members of the target company containing names,
addresses, shareholding and folio number, in electronic form, wherever
available, and a list of persons whose applications, if any, for
registration of transfer of shares are pending with the target company:
Provided that the acquirer shall reimburse reasonable costs
payable by the target company to external agencies in order to
furnish such information.
(6) Upon receipt of the detailed public statement, the board of
directors of the target company shall constitute a committee of
independent directors to provide reasoned recommendations on such
open offer, and the target company shall publish such
recommendations:
Provided that such committee shall be entitled to seek external
professional advice at the expense of the target company.
[Provided
88
further that while providing reasoned
recommendations on the open offer proposal, the committee shall
disclose the voting pattern of the meeting in which the open offer
proposal was discussed.]
(7) The committee of independent directors shall provide its written
reasoned recommendations on the open offer to the shareholders of the
target company and such recommendations shall be published in such
form as may be specified, at least two working days before the
commencement of the tendering period, in the same newspapers where
the public announcement of the open offer was published, and
simultaneously, a copy of the same shall be sent to,—
(i) the Board;
(ii) all the stock exchanges on which the shares of the target
company are listed, and the stock exchanges shall forthwith
disseminate such information to the public; and
(iii) to the manager to the open offer, and where there are
competing offers, to the manager to the open offer for every
competing offer.
(8) The board of directors of the target company shall facilitate the
acquirer in verification of shares tendered in acceptance of the open
offer.
(9) The board of directors of the target company shall make available
to all acquirers making competing offers, any information and co-
operation provided to any acquirer who has made a competing offer.
(10) Upon fulfillment by the acquirer, of the conditions required
under these regulations, the board of directors of the target company
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shall without any delay register the transfer of shares acquired by the
acquirer in physical form, whether under the agreement or from open
market purchases, or pursuant to the open offer.
27. Obligations of the manager to the open offer.—(1) Prior to
public announcement being made, the manager to the open offer shall
ensure that,—
(a) the acquirer is able to implement the open offer; and
(b) firm arrangements for funds through verifiable means have
been made by the acquirer to meet the payment obligations
under the open offer.
(2) The manager to the open offer shall ensure that the contents of
the public announcement, the detailed public statement and the letter
of offer and the post-offer advertisement are true, fair and adequate in
all material aspects, not misleading in any material particular, are
based on reliable sources, state the source wherever necessary, and are
in compliance with the requirements under these regulations.
(3) The manager to the open offer shall furnish to the Board a due
diligence certificate along with the draft letter of offer filed under
Regulation 16.
(4) The manager to the open offer shall ensure that market
intermediaries engaged for the purposes of the open offer are
registered with the Board.
(5) The manager to the open offer shall exercise diligence, care and
professional judgment to ensure compliance with these regulations.
(6) The manager to the open offer shall not deal on his own account
in the shares of the target company during the offer period.
(7) The manager to the open offer shall file a report with the Board
within fifteen working days from the expiry of the tendering period, in
such form as may be specified, confirming status of completion of
various open offer requirements.
CHAPTER V
DISCLOSURES OF SHAREHOLDING AND CONTROL
28. Disclosure-related provisions.—(1) The disclosures under this
Chapter shall be of the aggregated shareholding and voting rights of
the acquirer or promoter of the target company or every person acting
in concert with him.
(2) For the purposes of this Chapter, the acquisition and holding of
any convertible security shall also be regarded as shares, and
disclosures of such acquisitions and holdings shall be made accordingly.
[(3) For the purposes of this Chapter, the term “encumbrance”
89

shall include,—
(a) any restriction on the free and marketable title to shares, by
whatever name called, whether executed directly or indirectly;
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(b) pledge, lien, negative lien, non-disposal undertaking; or

(c) any covenant, transaction, condition or arrangement in the
nature of encumbrance, by whatever name called, whether
executed directly or indirectly.]
(4) Upon receipt of the disclosures required under this Chapter, the
stock exchange shall forthwith disseminate the information so received.
29. Disclosure of acquisition and disposal.—90 [(1) Any acquirer,
together with persons acting in concert with him acquiring shares or
voting rights in a target company, which taken together aggregates to
five per cent or more of the shares of such target company, shall
disclose their aggregate shareholding and voting rights in such target
company in such form as may be specified.]
[Provided that in case of listed entity which has listed its
91

specified securities on Innovators Growth Platform, any reference to

“five per cent” shall be read as “ten per cent”.]
[(2) 93 [Any person together] with persons acting in concert with
92

him, holds shares or voting rights entitling them to five per cent or
more of the shares or voting rights in a target company, shall disclose
the number of shares or voting rights held and change in shareholding
or voting rights, even if such change results in shareholding falling
below five per cent, if there has been change in such holdings from the
last disclosure made under sub-regulation (1) or under this sub-
regulation; and such change exceeds two per cent of total shareholding
or voting rights in the target company, in such form as may be
specified.]
[Provided that in case of listed entity which has listed its
94

specified securities on Innovators Growth Platform, any reference to

“five per cent” shall be read as “ten per cent” and any reference to
“two per cent” shall be read as “five per cent”.]
(3) The disclosures required under sub-regulation (1) and sub-
regulation (2) shall be made within two working days of the receipt of
intimation of allotment of shares, or the acquisition 95 [or the disposal]
of shares or voting rights in the target company to,—
(a) every stock exchange where the shares of the target company
are listed; and
(b) the target company at its registered office.
(4) For the purposes of this regulation, shares taken by way of
encumbrance shall be treated as an acquisition, sharesgiven upon
release of encumbrance shall be treated as a disposal, and disclosures
shall be made by such person accordingly in such form as may be
specified:
Provided that such requirement shall not apply to a scheduled
commercial bank or public financial institution 96 [or a housing
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finance company or a systemically important non-banking financial

company] as pledgee in connection with a pledge of shares for
securing indebtedness in the ordinary course of business.
97
[Explanation.—For the purpose of this sub-regulation,—
A. a “housing finance company” means a housing finance
company registered with the National Housing Bank for
carrying on the business of housing finance and is either
deposit taking or having asset size worth rupees five hundred
crores or more; and
B. a “systemically important non-banking financial company” shall
have the same meaning as assigned to it in the Securities and
Exchange Board of India (Issue of Capital and Disclosure
Requirements) Regulations, 2018.]
30. Continual disclosures.—98 [* * *]
31. Disclosure of encumbered shares.—(1) The promoter of every
target company shall disclose details of shares in such target company
encumbered by him or by persons acting in concert with him in such
form as may be specified:
[Provided that the aforesaid disclosure requirement shall not be
99

applicable where such encumbrance is undertaken in a depository.]

(2) The promoter of every target company shall disclose details of
any invocation of such encumbrance or release of such encumbrance of
shares in such form as may be specified:
[Provided that the aforesaid disclosure requirement shall not be
100

applicable where such encumbrance is undertaken in a depository.]

(3) The disclosures required under sub-regulation (1) and sub-
regulation (2) shall be made within seven working days from the
creation or invocation or release of encumbrance, as the case may be
to,—
(a) every stock exchange where the shares of the target company
are listed; and
(b) the target company at its registered office.
[(4) The promoter of every target company shall declare on a
101

yearly basis that he, along with persons acting in concert, has not made
any encumbrance, directly or indirectly, other than those already
disclosed during the financial year.
(5) The declaration required under sub-regulation (4) shall be made
within seven working days from the end of each financial year to —
(a) every stock exchange where the shares of the target company
are listed; and
(b) the audit committee of the target company.]
102
[CHAPTER V-A
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POWER TO RELAX STRICT ENFORCEMENT OF THE REGULATIONS

31-A. Exemption from enforcement of the regulations in
special cases.—(1) The Board may, exempt any person or class of
persons from the operation of all or any of the provisions of these
regulations for a period as may be specified but not exceeding twelve
months, for furthering innovation 103 [* * *] relating to testing new
products, processes, services, business models, etc. in live environment
of regulatory sandbox in the securities markets.
(2) Any exemption granted by the Board under sub-regulation (1)
shall be subject to the applicant satisfying such conditions as may be
specified by the Board including conditions to be complied with on a
continuous basis.
Explanation.—For the purposes of these regulations, “regulatory
sandbox” means a live testing environment where new products,
processes, services, business models, etc. may be deployed on a
limited set of eligible customers for a specified period of time, for
furthering innovation in the securities market, subject to such
conditions as may be specified by the Board.]
CHAPTER VI
MISCELLANEOUS
32. Power to issue directions.—(1) Without prejudice to its
powers under Chapter VI-A and Section 24 of the Act, the Board may,
in the interest of investors in securities and the securities market, issue
such directions 104 [or any other order] as it deems fit under Section 11
or Section 11-B or Section 11-D of the Act, including,—
(a) directing divestment of shares acquired in violation of these
regulations, whether through public auction or in the open
market, or through an offer for sale under the Securities and
Exchange Board of India (Issue of Capital and Disclosure
Requirements) Regulations, 2009, and directing the
appointment of a merchant banker for such divestiture;
(b) directing transfer of the shares, or any proceeds of a directed
sale of shares acquired in violation of these regulations to the
Investor Protection and Education Fund established under the
Securities and Exchange Board of India (Investor Protection
and Education Fund) Regulations, 2009;
(c) directing the target company or any depository not to give
effect to any transfer of shares acquired in violation of these
regulations;
(d) directing the acquirer or any person acting in concert, or any
nominee or proxy not to exercise any voting or other rights
attached to shares acquired in violation of these regulations;
(e) debarring any person who has violated these regulations from
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accessing the capital market or dealing in securities for such

period as may be directed, having regard to the nature and
gravity of the violation;
(f) directing the acquirer to make an open offer for acquiring
shares of the target company at such offer price as determined
by the Board in accordance with these regulations;
(g) directing the acquirer not to cause, and the target company
not to effect, any disposal of assets of the target company or
any of its subsidiaries contrary to the contents of the letter of
offer, where the conditions set out in the proviso to sub-
regulation (2) of Regulation 25 are not met;
(h) directing the acquirer who has failed to make an open offer or
has delayed the making of an open offer, to make the open
offer and to pay interest at such rate as considered appropriate
by the Board along with the offer price;
(i) directing the acquirer who has failed to make payment of the
open offer consideration to shareholders, not to make any open
offer or enter into any transaction that would attract the
obligation to make an open offer in respect of shares of any
target company for such period as the Board may deem fit;
(j) directing the acquirer who has made an open offer but has
delayed making payment of the open offer consideration to
shareholders, to pay interest at such rate as considered
appropriate by the Board for the delayed period;
(k) directing any person to cease and desist from exercising
control acquired over any target company without complying
with the requirements under these regulations;
(l) directing divestiture of such number of shares as would result
in the shareholding of an acquirer and persons acting in concert
with him being limited to the maximum permissible non-public
shareholding or below.
(2) In any proceedings initiated by the Board, the Board shall
comply with principles of natural justice before issuing directions to any
person.
(3) The Board may, for failure to carry out the requirements of these
regulations by any intermediary registered with the Board, initiate
appropriate proceedings in accordance with applicable regulations.
33. Power to remove difficulties.—In order to remove any
difficulties in the interpretation or application of the provisions of these
regulations, the Board 105 [may issue clarifications or guidelines from
time to time]:
106
[* * *]
34. Amendment to other regulations.—The regulations specified
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in the Schedule shall be amended in the manner and to the extent

stated therein.
35. Repeal and Savings.—(1) The Securities and Exchange Board
of India (Substantial Acquisition of Shares and Takeovers) Regulations,
1997, 107 [stands] repealed from the date on which these regulations
come into force.
(2) Notwithstanding such repeal,—
(a) anything done or any action taken or purported to have been
done or taken including comments on any letter of offer,
exemption granted by the Board, fees collected, any
adjudication, enquiry or investigation commenced or show-
cause notice issued under the repealed regulations, prior to
such repeal, shall be deemed to have been done or taken under
the corresponding provisions of these regulations;
(b) the previous operation of the repealed regulations or anything
duly done or suffered thereunder, any right, privilege,
obligation or liability acquired, accrued or incurred under the
repealed regulations, any penalty, forfeiture or punishment
incurred in respect of any offence committed against the
repealed regulations, or any investigation, legal proceeding or
remedy in respect of any such right, privilege, obligation,
liability, penalty, forfeiture or punishment as aforesaid, shall
remain unaffected as if the repealed regulations has never been
repealed;
(c) any open offer for which a public announcement has been
made under the repealed regulations shall be required to be
continued and completed under the repealed regulations.
(3) After the repeal of Securities and Exchange Board of India
(Substantial Acquisition of Shares and Takeovers) Regulations, 1997,
any reference thereto in any other regulations made, guidelines or
circulars issued thereunder by the Board shall be deemed to be a
reference to the corresponding provisions of these regulations.
SCHEDULE
[See Regulation 34]
Amendment to Securities and Exchange Board of India (Issue of
Capital and Disclosure Requirements) Regulations, 2009.
(i) In Regulation 3, in clause (f), for the full stop, the symbol “:”
shall be substituted;
(ii) In Regulation 3, after clause (f), the following new proviso
shall be inserted, namely:—
“Provided that the provisions of these regulations shall not
apply to issue of securities under clause (b), (d) and (e) of sub
-regulation (1) of Regulation 9 of Securities and Exchange
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Board of India (Substantial Acquisition of Shares and

Takeovers) Regulations, 2011.”;
(iii) In Regulation 74, after sub-regulation (2), the following new
sub-regulation shall be inserted:—
“(3) Notwithstanding anything contained in this regulation,
where a preferential allotment is made that attracts an
obligation to make an open offer for shares of the issuer under
Securities and Exchange Board of India (Substantial
Acquisition of Shares and Takeovers) Regulation, 2011, and
there is no offer made under sub-regulation (1) of Regulation
20 of the Securities and Exchange Board of India (Substantial
Acquisition of Shares and Takeovers) Regulation, 2011, the
period of fifteen days shall be counted from the expiry of the
period specified in sub-regulation (1) of Regulation 20 or date
of receipt of all statutory approvals required for the completion
of an open offer under the Securities and Exchange Board of
India (Substantial Acquisition of Shares and Takeovers)
Regulation, 2011:
Provided that if an offer is made under sub-regulation (1) of
Regulation 20 of the Securities and Exchange Board of India
(Substantial Acquisition of Shares and Takeovers) Regulation,
2011, the period of fifteen days shall be counted from the
expiry of the offer period as defined in the Securities and
Exchange Board of India (Substantial Acquisition of Shares and
Takeovers) Regulation, 2011:
Provided further that the provisions of this sub-regulation
shall not apply to an offer made under sub-regulation (1) of
Regulation 20 of the Securities and Exchange Board of India
(Substantial Acquisition of Shares and Takeovers) Regulation,
2011, pursuant to a preferential allotment.”;
(iv) In Schedule VIII, in part E, in paragraph 5, in clause (VI), in
sub-clause (C), after item 6, the following new item shall be
inserted, namely:—
“(6-A) Disclosure of ex-rights price as referred under clause
of (b) of sub-regulation 4 of Regulation 10 of Securities and
Exchange Board of India (Substantial Acquisition of Shares and
Takeovers) Regulation, 2011”.
———
1.
Vide, Notification No. F. No. LAD-NRO/GN/2011-12/24/30181, published in the Gazette of
India on 23-9-2011, Part-III, S. 4, dated 23-9-2011.

2.
Substituted by the SEBI (Listing of Specified Securities on Institutional Trading Platform)
Regulations, 2013, for the full stop.
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3.
Proviso substituted by the SEBI (Substantial Acquisition of Shares and Takeovers) (Third
Amendment) Regulations, 2015, w.e.f. 14-8-2015. Prior to its substitution, said Proviso, as
inserted by the SEBI (Listing of Specified Securities on Institutional Trading Platform)
Regulations, 2013, w.e.f. 8-10-2013, read as under:

“Provided that these regulations shall not apply to direct and indirect acquisition of
shares or voting rights in, or control over a company listed on the institutional trading
platform of a recognized stock exchange”

4.
Subs. for “institutional trading platform” by Noti. No. SEBI/LAD-NRO/GN/2021/19, dated 5-5
-2021 (w.e.f. 5-5-2021).

5.
Ins. by Noti. No. SEBI/LAD-NRO/GN/2021/60, dated 6-12-2021 (w.e.f. 6-12-2021).

6.
Subs. for “is made” by Noti. No. SEBI/LAD-NRO/GN/2018/33, dated 11-9-2018 (w.e.f. 11-9-
2018).

7. Ins. by Noti. No. SEBI/LAD-NRO/GN/2018/33, dated 11-9-2018 (w.e.f. 11-9-2018).

8.
Ins. by Noti. No. SEBI/LAD-NRO/GN/2018/33, dated 11-9-2018 (w.e.f. 11-9-2018).

9.
Inserted by the SEBI (Alternative Investment Funds) Regulations, 2012, w.e.f. 21-5-2012.

10.
Omitted by the SEBI (Foreign Portfolio Investors) Regulations, 2014, w.e.f. 7-1-2014. Prior
to its omission, item (ix) read as under:

“(ix) a foreign institutional investor and its sub-accounts;”

11. Subs. by Noti. No. SEBI/LAD-NRO/GN/2018/33, dated 11-9-2018 (w.e.f. 11-9-2018). Prior
to substitution it read as:

“(r) “postal ballot” means a postal ballot as provided for under the Companies (Passing
of the Resolution by Postal Ballot) Rules, 2001 made under the Companies Act, 1956 (1 of
1956);”

12.
Inserted by the SEBI (Substantial Acquisition of Shares and Takeovers) (Second
Amendment) Regulations, 2016, w.e.f. 25-05-2016.

13.
Clause (ze) renumbered as clause “(zf)” by the SEBI (Substantial Acquisition of Shares and
Takeovers) (Second Amendment) Regulations, 2016, w.e.f. 25-05-2016.

14.
Subs. for “Companies Act, 1956 (1 of 1956)” by Noti. No. SEBI/LAD-NRO/GN/2018/33,
dated 11-9-2018 (w.e.f. 11-9-2018).

15.
Ins. by Noti. No. SEBI/LAD-NRO/GN/2020/14, dated 16-6-2020 (w.e.f. 16-6-2020).

16. Ins. by Noti. No. SEBI/LAD-NRO/GN/2018/20, dated 31-5-2018 (w.e.f. 1-6-2018).

17.
Inserted by the SEBI (Substantial Acquisition of Shares and Takeovers) (Amendment)
Regulations, 2016, w.e.f. 17-02-2016.

18.
Ins. by Noti. No. SEBI/LAD-NRO/GN/2021/19, dated 5-5-2021 (w.e.f. 5-5-2021).
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19.
Subs. by Noti. No. SEBI/LAD-NRO/GN/2021/60, dated 6-12-2021 (w.e.f. 6-12-2021). Prior
to substitution it read as:

“5-A. Delisting offer.—(1) Notwithstanding anything contained in these regulations,

in the event the acquirer makes a public announcement of an open offer for acquiring
shares of a target company in terms of Regulations 3, 4 or 5, he may delist the company
in accordance with provisions of the Securities and Exchange Board of India (Delisting of
Equity Shares) Regulations, 2009: Provided that the acquirer shall have declared upfront
his intention to so delist at the time of making the detailed public statement and a
subsequent declaration of delisting for the purpose of the offer proposed to be made
under sub-regulation (1) will not suffice.

(2) Where an offer made under sub-regulation (1) is not successful,—

(i) on account of non-receipt of prior approval of shareholders in terms of clause

(b) of sub-regulation (1) of Regulation 8 of Securities and Exchange Board of India
(Delisting of Equity Shares) Regulations, 2009; or

(ii) in terms of Regulation 17 of Securities and Exchange Board of India (Delisting

of Equity Shares) Regulations, 2009; or

(iii) on account of the acquirer rejecting the discovered price determined by the
book building process in terms of sub-regulation (1) of Regulation 16 of Securities and
Exchange Board of India (Delisting of Equity Shares) Regulations, 2009, the acquirer
shall make an announcement within two working days in respect of such failure in all
the newspapers in which the detailed public statement was made and shall comply
with all applicable provisions of these regulations.

(3) In the event of failure of the delisting offer made under sub-regulation (1), the
open offer obligations shall be fulfilled by the acquirer in the following manner:

(i) the acquirer, through the manager to the open offer, shall within five working
days from the date of the announcement under sub-regulation (2), file with the Board,
a draft of the letter of offer as specified in sub-regulation (1) of Regulation 16; and

(ii) shall comply with all other applicable provisions of these regulations.

Provided that the offer price shall stand enhanced by an amount equal to a
sum determined at the rate of ten per cent per annum for the period between the
scheduled date of payment of consideration to the shareholders and the actual date
of payment of consideration to the shareholders.

Explanation: For the purpose of this sub-regulation, scheduled date shall be

the date on which the payment of consideration ought to have been made to the
shareholders in terms of the timelines in these regulations.

(4) Where a competing offer is made in terms of sub-regulation (1) of Regulation 20,—

(a) the acquirer shall not be entitled to delist the company;

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(b) the acquirer shall not be liable to pay interest to the shareholders onaccount
of delay due to competing offer;

(c ) the acquirer shall comply with all the applicable provisions of theseregulations
and make an announcement in this regard, within twoworking days from the date of
public announcement made in terms ofsub-regulation (1) of Regulation 20, in all the
newspapers in which thedetailed public statement was made.

(5) Shareholders who have tendered shares in acceptance of the offer madeunder sub
-regulation (1), shall be entitled to withdraw such shares tendered,within 10 working days
from the date of the announcement under sub-regulation(2).

(6) Shareholders who have not tendered their shares in acceptance of theoffer made
under sub-regulation (1) shall be entitled to tender their shares inacceptance of the offer
made under these regulations.”

20.
Ins. by Noti. No. SEBI/LAD-NRO/GN/2020/14, dated 16-6-2020 (w.e.f. 16-6-2020).

21.
Ins. by Noti. No. SEBI/LAD-NRO/GN/2021/19, dated 5-5-2021 (w.e.f. 5-5-2021).

22.
Inserted by the SEBI (Substantial Acquisition of Shares and Takeovers) (Second
Amendment) Regulations, 2016, w.e.f. 25-05-2016.

23.
Ins. by Noti. No. SEBI/LAD-NRO/GN/2018/33, dated 11-9-2018 (w.e.f. 11-9-2018).

24. Subs. for “total shares of” by Noti. No. SEBI/LAD-NRO/GN/2018/33, dated 11-9-2018
(w.e.f. 11-9-2018).

25. Ins. by Noti. No. SEBI/LAD-NRO/GN/2021/60, dated 6-12-2021 (w.e.f. 6-12-2021).

26.
Subs. by Noti. No. SEBI/LAD-NRO/GN/2021/60, dated 6-12-2021 (w.e.f. 6-12-2021). Prior
to substitution it read as:

“(5) The acquirer whose shareholding exceeds the maximum permissible non-public
shareholding, pursuant to an open offer under these regulations, shall not be eligible to
make a voluntary delisting offer under the Securities and Exchange Board of India
(Delisting of Equity Shares) Regulations, 2009, unless a period of twelve months has
elapsed from the date of the completion of the offer period.”

27.
Subs. for “Securities and Exchange Board of India (Delisting of Equity Shares) Regulations,
2009” by Noti. No. SEBI/LAD-NRO/GN/2021/60, dated 6-12-2021 (w.e.f. 6-12-2021).

28.
Subs. for “listing agreement” by Noti. No. SEBI/LAD-NRO/GN/2018/33, dated 11-9-2018
(w.e.f. 11-9-2018).

29.
Subs. for “listing agreement” by Noti. No. SEBI/LAD-NRO/GN/2018/33, dated 11-9-2018
(w.e.f. 11-9-2018).

30.
Subs. for “sub-section (1-A) of Section 81 of the Companies Act, 1956 (1 of 1956)” by
Noti. No. SEBI/LAD-NRO/GN/2018/33, dated 11-9-2018 (w.e.f. 11-9-2018).

31.
Subs. for “listing agreement” by Noti. No. SEBI/LAD-NRO/GN/2018/33, dated 11-9-2018
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(w.e.f. 11-9-2018).

32.
Ins. by Noti. No. SEBI/LAD-NRO/GN/2018/33, dated 11-9-2018 (w.e.f. 11-9-2018).

33. Subs. for “listing agreement” by Noti. No. SEBI/LAD-NRO/GN/2018/33, dated 11-9-2018
(w.e.f. 11-9-2018).

34.
Subs. for “listing agreement” by Noti. No. SEBI/LAD-NRO/GN/2018/33, dated 11-9-2018
(w.e.f. 11-9-2018).

35.
Ins. by Noti. No. SEBI/LAD-NRO/GN/2017-18/015, dated 14-8-2017 (w.e.f. 14-8-2017).

36.
The words “or a competent authority” omitted by Noti. No. SEBI/LAD-NRO/GN/2019/06,
dated 29-3-2019 (w.e.f. 29-3-2019).

37.
Ins. by Noti. No. SEBI/LAD-NRO/GN/2017-18/015, dated 14-8-2017 (w.e.f. 14-8-2017).

38. The words “or a competent authority” omitted by Noti. No. SEBI/LAD-NRO/GN/2019/06,
dated 29-3-2019 (w.e.f. 29-3-2019).

39. Ins. by Noti. No. SEBI/LAD-NRO/GN/2017-18/015, dated 14-8-2017 (w.e.f. 14-8-2017).

40.
Subs. by Noti. No. SEBI/LAD-NRO/GN/2021/60, dated 6-12-2021 (w.e.f. 6-12-2021). Prior
to substitution it read as:

“(f) acquisition pursuant to the provisions of the Securities and Exchange Board of
India (Delisting of Equity Shares) Regulations, 2009;”

41. Subs. for “sub-section (2) of Section 87 of the Companies Act, 1956 (1 of 1956)” by Noti.
No. SEBI/LAD-NRO/GN/2018/33, dated 11-9-2018 (w.e.f. 11-9-2018).

42.
Subs. by Noti. No. SEBI/LAD-NRO/GN/2017-18/015, dated 14-8-2017 (w.e.f. 14-8-2017).
Prior to substitution it read as:

“(i) Conversion of debt into equity under Strategic Debt Restructuring Scheme -
Acquisition of equity shares by the consortium of banks, financial institutions and other
secured lenders pursuant to conversion of their debt as part of the Strategic Debt
Restructuring Scheme in accordance with the guidelines specified by the Reserve Bank of
India: Provided that the conditions specified under sub-regulation (5) or (6) of Regulation
70 of the Securities and Exchange Board of India (Issue of Capital and Disclosure
Requirements) Regulations, 2009, as may be applicable, are complied with.”

43.
The words “scheme” omitted by Noti. No. SEBI/LAD-NRO/GN/2019/06, dated 29-3-2019
(w.e.f. 29-3-2019).

44.
Subs. by Noti. No. SEBI/LAD-NRO/GN/2019/06, dated 29-3-2019 (w.e.f. 29-3-2019). Prior
to substitution it read as:

“Provided that the conditions specified under sub-regulation (5) of Regulation 70 of

the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements)
Regulations, 2009 are complied with.”
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45.
Ins. by Noti. No. SEBI/LAD-NRO/GN/2019/06, dated 29-3-2019 (w.e.f. 29-3-2019).

46.
Ins. by Noti. No. SEBI/LAD-NRO/GN/2017-18/015, dated 14-8-2017 (w.e.f. 14-8-2017).

47. Omitted by Noti. No. SEBI/LAD-NRO/GN/2019/06, dated 29-3-2019 (w.e.f. 29-3-2019).

Prior to omission it read as:

“(ia) Acquisition of shares by the person(s), by way of allotment by the target

company or purchase from the lenders at the time of lenders selling their shareholding or
enforcing change in ownership in favour of such person(s), pursuant to a debt
restructuring scheme implemented in accordance with the guidelines specified by the
Reserve Bank of India:

Provided that in respect of acquisition by persons by way of allotment by the target

company, the conditions specified under sub-regulation (6) of Regulation 70 of the
Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements)
Regulations, 2009 are complied with:

Provided further that in respect of acquisition by way of purchase of shares from the
lenders, the acquisition shall be exempted subject to the compliance with the following
conditions:

(a) the guidelines for determining the purchase price have been specified by the
Reserve Bank of India and that the purchase price has been determined in accordance
with such guidelines;

(b) the purchase price shall be certified by two independent qualified valuers, and
for this purpose “valuer” shall be a person who is registered under Section 247 of the
Companies Act, 2013 and the relevant Rules framed thereunder:

Provided that till such date on which Section 247 of the Companies Act, 2013 and
the relevant Rules come into force, valuer shall mean an independent merchant banker
registered with the Board or an independent chartered accountant in practice having
a minimum experience of ten years;

(c ) the specified securities so purchased shall be locked-in for a period of at least

three years from the date of purchase;

(d) the lock-in of equity shares acquired pursuant to conversion of convertible

securities purchased from the lenders shall be reduced to the extent the convertible
securities have already been locked-in;

(e) a special resolution has been passed by shareholders of the issuer before the
purchase;

(f) the issuer shall, in addition to the disclosures required under the Companies
Act, 2013 or any other applicable law, disclose the following information pertaining to
the proposed acquirer(s) in the explanatory statement to the notice for the general
meeting proposed for passing special resolution as stipulated at clause (e) of this sub-
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regulation:

a. the identity including of the natural persons who are the ultimate beneficial
owners of the shares proposed to be purchased and/or who ultimately control the
proposed acquirer(s);

b. the business model;

c. a statement on growth of business over the period of time;

d. summary of audited financials of previous three financial years;

e. track record in turning around companies, if any;

f. the proposed roadmap for effecting turnaround of the issuer.”

48. Inserted by the SEBI(Substantial Acquisition of Shares and Takeovers) (Fourth

Amendment) Regulations, 2015, w.e.f. 22-12-2015.

49.
Omitted by Noti. No. SEBI/LAD-NRO/GN/2019/06, dated 29-3-2019 (w.e.f. 29-3-2019).
Prior to omission it read as:

“(2) The acquisition of shares of a target company, not involving a change of control
over such target company, pursuant to a scheme of corporate debt restructuring in terms
of the Corporate Debt Restructuring Scheme notified by the Reserve Bank of India vide
circular no. B.P.BC 15/21.04, 114/2001 dated August 23, 2001, or any modification or re-
notification thereto provided such scheme has been authorised by shareholders by way of
a special resolution passed by postal ballot, shall be exempted from the obligation to make
an open offer under Regulation 3.”

50. Ins. by Noti. No. SEBI/LAD-NRO/GN/2019/27, dated 29-7-2019 (w.e.f. 29-7-2019).

51.
Ins. by Noti. No. SEBI/LAD-NRO/GN/2020/19, dated 22-6-2020 (w.e.f. 22-6-2020).

52. Inserted by the SEBI(Substantial Acquisition of Shares and Takeovers) (Amendment)

Regulations, 2013, w.e.f. 26-03-2013.

53. Substituted for “on which the voting rights so increase” by the SEBI(Substantial
Acquisition of Shares and Takeovers) (Amendment) Regulations, 2013, w.e.f. 26-03-2013.

54. Subs. for “Section 77-A of the Companies Act, 1956 (1 of 1956)” by Noti. No. SEBI/LAD-
NRO/GN/2018/33, dated 11-9-2018 (w.e.f. 11-9-2018).

55.
Subs. for “Section 77-A of the Companies Act, 1956 (1 of 1956)” by Noti. No. SEBI/LAD-
NRO/GN/2018/33, dated 11-9-2018 (w.e.f. 11-9-2018).

56. Substituted for “on which the voting rights so increase” by the SEBI(Substantial
Acquisition of Shares and Takeovers) (Amendment) Regulations, 2013, w.e.f. 26-03-2013.

57.
Inserted by the SEBI (Alternative Investment Funds) Regulations, 2012, w.e.f 21-05-2012.

58.
Ibid.
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59.
Subs. by Noti. No. SEBI/LAD-NRO/GN/2023/121, dated 7-2-2023 (w.e.f. 1-4-2023). Prior
to substitution it read as:

“(7) In respect of any acquisition of or increase in voting rights pursuant to exemption

provided for in clause (a) of sub-regulation (1), sub-clause (iii) of clause (d) of sub-
regulation (1), clause (h) of sub-regulation (1), sub-regulation (2), sub-regulation (3) and
clause (c) of sub-regulation (4), clauses (a), (b) and (f) of sub-regulation (4), the acquirer
shall, within twenty-one working days of the date of acquisition, submit a report in such form
as may be specified along with supporting documents to the Board giving all details in respect
of acquisitions, along with a non-refundable fee of rupees one lakh fifty thousand by way of
direct credit in the bank account through NEFT/RTGS/IMPS or any other mode allowed by RBI
or by way of a banker's cheque or demand draft payable in Mumbai in favour of the Board.”

60.
Subs. by Noti. No. SEBI/LAD-NRO/GN/2023/121, dated 7-2-2023 (w.e.f. 1-4-2023). Prior
to substitution it read as:

“(4) The acquirer or the target company, as the case may be, shall along with the application
referred to under sub-regulation (3) pay a non-refundable fee of rupees five lakh, by way of
direct credit in the bank account through NEFT/RTGS/IMPS or any other mode allowed by RBI
or by way of a banker's cheque or demand draft payable in Mumbai in favour of the Board.”

61.
Substituted for “special resolution is passed for allotment of shares under sub-section (1A)
of Section 81 of the Companies Act, 1956. by the SEBI(Substantial Acquisition of Shares and
Takeovers) (Amendment) Regulations, 2013, w.e.f. 26-03-2013.

62.
Substituted for “such increase in the voting rights beyond the relevant threshold
stipulated in Regulation 3” by the SEBI(Substantial Acquisition of Shares and Takeovers)
(Amendment) Regulations, 2013, w.e.f. 26-03-2013.

63.
Inserted by the SEBI(Substantial Acquisition of Shares and Takeovers) (Amendment)
Regulations, 2013, w.e.f. 26-03-2013.

64.
The words “and” omitted. by Noti. No. SEBI/LAD-NRO/GN/2021/60, dated 6-12-2021
(w.e.f. 6-12-2021).

65.
Subs. for “if any” by Noti. No. SEBI/LAD-NRO/GN/2021/60, dated 6-12-2021 (w.e.f. 6-12-
2021).

66.
Ins. by Noti. No. SEBI/LAD-NRO/GN/2021/60, dated 6-12-2021 (w.e.f. 6-12-2021).

67.
Inserted by the SEBI (Payment of Fees and Mode of Payment) (Amendment) Regulations,
2017, w.e.f. 6-3-2017.

68.
Subs. for “any other mode allowed by RBI or] by way of a banker's cheque or demand draft
payable in Mumbai in favour of the Board” by Noti. No. SEBI/LAD-NRO/GN/2023/121, dated 7-
2-2023 (w.e.f. 1-4-2023).

69. Substituted by the SEBI (Payment of fees) (Amendment) Regulations, 2014 w.e.f. 23-05-
2014. Prior to its substitution, the table in sub-regulation (1), read as under,
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Sl. No. Consideration payable under Fee (Rs.)

the Open Offer

a. Upto ten crore rupees. One lakh twenty five thousands rupees (Rs.
1,25,000)

b. More than ten crore rupees, but One lakh twenty five thousands rupees (Rs.
less than or equal to one thousand 1,25,000) plus 0.025 per cent of the portion
crore rupees. of the offer size in excess of ten crore
rupees (Rs. 10,00,00,000).

c. More than one thousand crore One crore twenty five lakh rupees (Rs.
rupees, but less than or equal to 1,25,00,000) plus 0.03125 per cent of the
five thousand crore rupees. portion of the offer size in excess of one
thousand crore rupees (Rs.
1000,00,00,000).

d. More than five thousand crore Two crore fifty lakh rupees (Rs.
rupees. 2,50,00,000) plus 0.01 per cent of the
portion of the offer size in excess of five
thousand crore rupees (Rs.
5000,00,00,000), subject to a maximum of
three crore rupees (Rs. 3,00,00,000).

70.
Ins. by Noti. No. SEBI/LAD-NRO/GN/2020/20, dated 1-7-2020 (w.e.f. 1-7-2020).

71. Ins. by Noti. No. SEBI/LAD-NRO/GN/2020/20, dated 1-7-2020 (w.e.f. 1-7-2020).

72.
Ins. by Noti. No. SEBI/LAD-NRO/GN/2018/33, dated 11-9-2018 (w.e.f. 11-9-2018).

73. Ins. by Noti. No. SEBI/LAD-NRO/GN/2018/33, dated 11-9-2018 (w.e.f. 11-9-2018).

74.
Subs. for “three working days” by Noti. No. SEBI/LAD-NRO/GN/2018/33, dated 11-9-2018
(w.e.f. 11-9-2018).

75.
Inserted by the SEBI (Substantial Acquisition of Shares and Takeovers) (Amendment)
Regulations, 2015, w.e.f. 24-03-2015.

76.
Ins. by Noti. No. SEBI/LAD-NRO/GN/2020/20, dated 1-7-2020 (w.e.f. 1-7-2020).

77.
Subs. for “three working days” by Noti. No. SEBI/LAD-NRO/GN/2018/33, dated 11-9-2018
(w.e.f. 11-9-2018).

78.
Subs. by Noti. No. SEBI/LAD-NRO/GN/2021/60, dated 6-12-2021 (w.e.f. 6-12-2021). Prior
to substitution it read as:

“Provided that in case of an offer made under sub-regulation (1) of Regulation 20,
pursuant to a preferential allotment, the offer shall be completed within the period as
provided under sub-regulation (1) of Regulation 74 of Securities and Exchange Board of
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India (Issue of Capital and Disclosure) Regulations, 2009.”

79.
Inserted by the SEBI (Substantial Acquisition of Shares and Takeovers) (Amendment)
Regulations, 2015, w.e.f. 24-03-2015.

80.
Subs. for “Regulations 3, 4 or 5” by Noti. No. SEBI/LAD-NRO/GN/2021/60, dated 6-12-2021
(w.e.f. 6-12-2021).

81.
Subs. for “sub-regulation (1) Regulation 18 of Securities and Exchange Board of India
(Delisting of Equity Shares) Regulations, 2009” by Noti. No. SEBI/LAD-NRO/GN/2021/60, dated
6-12-2021 (w.e.f. 6-12-2021).

82. Subs. for “one hundred per cent of the” by Noti. No. SEBI/LAD-NRO/GN/2018/33, dated 11
-9-2018 (w.e.f. 11-9-2018).

83. Ins. by Noti. No. SEBI/LAD-NRO/GN/2021/60, dated 6-12-2021 (w.e.f. 6-12-2021).

84. Inserted by the SEBI(Substantial Acquisition of Shares and Takeovers) (Amendment)

Regulations, 2013, w.e.f. 26-03-2013.

85.
The words “other than through bulk deals or block deals,” omitted by Noti. No. SEBI/LAD-
NRO/GN/2020/20, dated 1-7-2020 (w.e.f. 1-7-2020).

86.
Inserted by the SEBI(Substantial Acquisition of Shares and Takeovers) (Amendment)
Regulations, 2013, w.e.f. 26-03-2013.

87. Subs. for “one hundred per cent of the” by Noti. No. SEBI/LAD-NRO/GN/2018/33, dated 11
-9-2018 (w.e.f. 11-9-2018).

88.
Ins. by Noti. No. SEBI/LAD-NRO/GN/2021/19, dated 5-5-2021 (w.e.f. 5-5-2021).

89. Subs. by Noti. No. SEBI/LAD-NRO/GN/2019/27, dated 29-7-2019 (w.e.f. 29-7-2019). Prior
to substitution it read as:

‘(3) For the purposes of this Chapter, the term “encumbrance” shall include a pledge,
lien or any such transaction, by whatever name called.’

90.
Subs. by Noti. No. SEBI/LAD-NRO/GN/2021/46, dated 13-8-2021 (w.e.f. 1-4-2022). Prior
to substitution it read as:

“(1) Any acquirer who acquires shares or voting rights in a target company which
taken together with shares or voting rights, if any, held by him and by persons acting in
concert with him in such target company, aggregating to five per cent or more of the
shares of such target company, shall disclose their aggregate shareholding and voting
rights in such target company in such form as may be specified.”

91.
Ins. by Noti. No. SEBI/LAD-NRO/GN/2021/19, dated 5-5-2021 (w.e.f. 5-5-2021).

92.
Substituted by the SEBI(Substantial Acquisition of Shares and Takeovers) (Amendment)
Regulations, 2013, w.e.f. 26-03-2013. Prior to its substitution, sub-regulation (2) read as
under:
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“(2) Any acquirer, who together with persons acting in concert with him, holds shares
or voting rights entitling them to five per cent or more of the shares or voting rights in a
target company, shall disclose every acquisition or disposal of shares of such target
company representing two per cent or more of the shares or voting rights in such target
company in such form as may be specified”.

93.
Subs. for “Any person, who together” by Noti. No. SEBI/LAD-NRO/GN/2021/46, dated 13-8
-2021 (w.e.f. 1-4-2022).

94.
Ins. by Noti. No. SEBI/LAD-NRO/GN/2021/19, dated 5-5-2021 (w.e.f. 5-5-2021).

95.
Ins. by Noti. No. SEBI/LAD-NRO/GN/2018/33, dated 11-9-2018 (w.e.f. 11-9-2018).

96.
Ins. by Noti. No. SEBI/LAD-NRO/GN/2018/55, dated 28-12-2018 (w.e.f. 31-12-2018).

97. Ins. by Noti. No. SEBI/LAD-NRO/GN/2018/55, dated 28-12-2018 (w.e.f. 31-12-2018).

98. Omitted by Noti. No. SEBI/LAD-NRO/GN/2021/46, dated 13-8-2021 (w.e.f. 1-4-2022). Prior
to omission it read as:

“30. Continual disclosures.—(1) Every person, who together with persons acting in
concert with him, holds shares or voting rights entitling him to exercise twenty-five per
cent or more of the voting rights in a target company, shall disclose their aggregate
shareholding and voting rights as of the thirty-first day of March, in such target company
in such form as may be specified.

(2) The promoter of every target company shall together with persons acting in
concert with him, disclose their aggregate shareholding and voting rights as of the thirty-
first day of March, in such target company in such form as may be specified.

(3) The disclosures required under sub-regulation (1) and sub-regulation (2) shall be
made within seven working days from the end of each financial year to,—

(a) every stock exchange where the shares of the target company are listed; and

(b) the target company at its registered office.”

99.
Ins. by Noti. No. SEBI/LAD-NRO/GN/2021/46, dated 13-8-2021 (w.e.f. 1-4-2022).

100. Ins. by Noti. No. SEBI/LAD-NRO/GN/2021/46, dated 13-8-2021 (w.e.f. 1-4-2022).

101.
Ins. by Noti. No. SEBI/LAD-NRO/GN/2019/27, dated 29-7-2019 (w.e.f. 29-7-2019).

102.
Ins. by Noti. No. SEBI/LAD-NRO/GN/2020/10, dated 17-4-2020 (w.e.f. 17-4-2020).

103.
The words “in technological aspects” omitted by Noti. No. SEBI/LAD-NRO/GN/2021/30,
dated 3-8-2021 (w.e.f. 3-8-2021).

104.
Ins. by Noti. No. SEBI/LAD-NRO/GN/2018/33, dated 11-9-2018 (w.e.f. 11-9-2018).

105.
Subs. for “shall have the power to issue directions through guidance notes or circulars:”
by Noti. No. SEBI/LAD-NRO/GN/2018/33, dated 11-9-2018 (w.e.f. 11-9-2018).
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106.
Omitted by Noti. No. SEBI/LAD-NRO/GN/2018/33, dated 11-9-2018 (w.e.f. 11-9-2018).
Prior to omission it read as:

“Provided that where any direction is issued by the Board in a specific case relating to
interpretation or application of any provision of these regulations, it shall be done only
after affording a reasonable opportunity of being heard to the concerned persons and
after recording reasons for the direction.”

107.
Subs. for “stand” by Noti. No. SEBI/LAD-NRO/GN/2018/33, dated 11-9-2018 (w.e.f. 11-9-
2018).

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