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TMI BlogGeneral exemptionsX X X X Extracts X X X X X X X X Extracts X X X X ..... ersons; 2 [Explanation: For the purpose of this sub-clause, the 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 3[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 4[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 issuanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er 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 a court [or a tribunal]5 21[***] 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 6[or a tribunal] 21[***] 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 consid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... change 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 164A 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 12[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 wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompany: Provided further 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 16[of closure of the buy-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 17[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 18[or category I Alternativ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9-2018. Prior to this, it read as "listing agreement". 4 Ibid 5 Inserted by the SEBI (Substantial Acquisition of Shares and Takeovers) (Amendment) Regulations, 2017, w.e.f 14.8.2017. 6 Inserted by the SEBI (Substantial Acquisition of Shares and Takeovers) (Amendment) Regulations, 2017, w.e.f 14.8.2017. 7 Inserted ibid. 8 Substituted by the SEBI (Substantial Acquisition of Shares and Takeovers) (Second Amendment) Regulations, 2018, w.e.f. 11-09-2018. Prior to this, it read as "sub-section (2) of section 87 of the Companies Act, 1956 (1 of 1956)". 9 Substituted by the SEBI (Substantial Acquisition of Shares and Takeovers) (Amendment) Regulations, 2017, w.e.f 14.8.2017. Prior to the substitution, clause (i), inserted by the SEBI (Substantial Acquisition of Shares and Takeovers) (Second Amendment) Regulations, 2015, w.e.f. 05-05-2015, read as follows: "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 Reserv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before it was read as "10[(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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. SEBI/LAD-NRO/GN/2019/27 dated 29-07-2019 28. Inserted vide Notification No. SEBI/LAD-NRO/GN/2020/19 dated 22-06-2020 29. Substituted vide Notification No. SEBI/LAD-NRO/GN/2021/60 dated 06-12-2021 before it was read as "(f) acquisition pursuant to the provisions of the Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009;" 30. Substituted vide Notification No. SEBI/LAD-NRO/GN/2023/121 dated 07-02-2023, w.e.f. 01-04-2023 before it was 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 19[one lakh fifty thousand] 20[by way of direct credit in the bank account thr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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