The Takeover Regulations punish one thing above all: buying first and checking later. Cross 5% without disclosing, creep past your yearly limit, or forget that a relative's holding counts as yours — and the open offer you never planned becomes mandatory. We map your triggers before you trade.
SEBI's Substantial Acquisition of Shares and Takeovers Regulations, 2011 — SAST — govern what happens when someone builds a meaningful stake in a listed company. Two duties sit at its core: tell the market (disclosures at 5% and beyond, plus annual promoter disclosures), and offer the minority an exit (a mandatory open offer once you cross 25% of voting rights or take control).
The third duty is the one people miss: persons acting in concert. Holdings of PACs — relatives, group entities, anyone coordinating — aggregate with yours. The 5% and 25% thresholds apply to the combined holding, not to you alone. Most SAST violations we see are not deliberate; they are arithmetic done without the PAC column.
There is also the offer process itself: public announcement, detailed public statement, letter of offer, and a timetable the regulations fix in working days. It runs alongside your merchant banker, but the compliance spine — announcements filed on time, disclosures consistent across every document — is secretarial work. Done right, nobody notices it. That is the point.
Anyone accumulating shares in a listed company: promoters consolidating holding, private equity funds building pre-deal stakes, strategic investors, and families reorganising inter-se holdings. If your buying programme has a number in mind, you need the trigger map before the first trade.
Boards and target companies also need SAST counsel — when an open offer lands, the independent directors must give a reasoned recommendation, and the company has to manage disclosures, trading halts and shareholder communication without tripping over PIT Regulations at the same time.
Lenders with invoked pledges end up here too. When a pledge is invoked, the lender can cross thresholds overnight without buying a share — and suddenly faces disclosure and offer obligations it never planned for. If your loan book has listed-company collateral, the SAST math belongs in the credit file.
Disclosures run on working-day clocks: 2 days for Reg 7 filings, 7 working days after year-end for Reg 30. An open offer, once triggered, typically takes three to four months from public announcement to payment — the timetable is set by the regulations, not by us. Creeping calendars are maintained across financial years.
Disclosure-only mandates are quoted as fixed fees; trigger analysis is scoped by transaction complexity. Open offer management is priced with the deal — merchant banker fees, advertising and registrar costs sit outside our fee and we will tell you the realistic total before you commit.
Two triggers: acquiring shares or voting rights of 25% or more (Reg 10), or acquiring control over the company irrespective of percentage (Reg 11). Either one obliges the acquirer to make an open offer for at least 26% more of the company’s shares.
25% of shares or voting rights under Reg 10. Cross that line — alone or together with persons acting in concert — and a mandatory open offer follows. Below 25%, only disclosure obligations apply.
If you already hold 25% or more but less than 75%, Reg 10(2) lets you acquire up to 5% more per financial year without triggering an open offer. It is a yearly allowance, not cumulative — unused headroom does not carry forward.
At least 26% of the total shares of the target company. The acquirer must offer to buy that minimum from public shareholders at the computed offer price — it is a floor, not a ceiling.
Reg 8 sets the formula: broadly the highest of the negotiated price paid for the triggering acquisition, the 52-week volume-weighted average market price, and the highest price the acquirer paid for any shares in the 26 weeks before the public announcement.
Reg 7(1): the acquirer must disclose the acquisition to the target company within 2 working days of crossing 5% of shares or voting rights, and the company then informs the stock exchanges. Every threshold crossing starts a disclosure clock.
An acquirer already holding 5% or more must disclose every subsequent change of 2% or more — acquisition or disposal — to the target company and the exchanges within 2 working days. It keeps the market informed of material holding changes between the bigger thresholds.
Promoters and persons acting in concert must disclose their aggregate shareholding as of 31 March each year, within 7 working days of the financial year-end. It is a yearly snapshot the market uses to track promoter holding trends.
Yes. Reg 11 triggers a mandatory open offer on acquisition of control alone, even at 1% shareholding. Control means the right to appoint a majority of directors or to control management decisions — SEBI looks at substance, and shareholders’ agreements are examined closely.
The main exemptions cover inter-se transfers between promoters and qualifying PACs, acquisitions under schemes of arrangement, transmission or succession, acquisitions by government companies, and purchases through stock exchange settlement in the ordinary course. Each exemption has conditions — and disclosure obligations usually survive the exemption.
Often, yes — Reg 10(1)(a) exempts transfers between promoters and persons acting in concert who meet the prescribed conditions, including a three-year holding relationship. But the conditions are strict, and disclosure obligations usually survive the exemption.
Only in narrow circumstances permitted by SEBI — for example, if a required statutory approval is refused, or a condition stated upfront in the offer is not met. A change of mind or a market fall is not grounds. Withdrawal needs SEBI’s approval and public disclosure of the reasons.
Roughly three to four months from public announcement to payment reaching tendering shareholders, following the statutory timetable — offer document filing, SEBI observations, tendering period, and settlement. Plan financing and board approvals around that timeline.
A shareholder holding 25% or more may voluntarily offer to buy at least 10% more from public shareholders, without any triggering acquisition. Companies use it to consolidate holdings or signal confidence — but once announced, the full offer process and pricing rules apply.
Yes. Reg 7(2) requires promoters and PACs to disclose creation, invocation or release of encumbrance within 2 working days. Invocation of a pledge by a lender can itself shift holdings materially — which is why lenders’ actions are watched as closely as promoters’.
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