THE GAZETTE OF INDIA EXTRAORDINARY PART ~ III - SECTION 4 PUBLISHED BY AUTHORITY NEW DELHI, SEPTEMBER 23, 2011 SECURITIES AND EXCHANGE BOARD OF INDIA. NOTIFICATION Mumbai, 23 September, 2011 SECURITIES AND EXCHANGE BOARD OF INDIA (SUBSTANTIAL ACQUISITION OF SHARES AND TAKEOVERS) REGULATIONS, 2011 F. No, LAD-NRO/GN/2011-12/24/30181—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 -1 PRELIMINARY Short title, commencement and applicability. 1. (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 *(:] * Substituted by the SEBI (Listing of Specified Securities on Institutional Trading Platform) Regulations, 2013, forthe fill stop. Page 1 of 77*[Provided that these regulations shall not apply to direct and indirect acquisition of shares or voting rights in, or control over a company listed without making a public issue, on the *[ Innovators Growth Platform] of a recognised stock exchange.] Definitions. 2. (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 indireetly, 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); (4) “Board” means the Securities and Exchange Board of India established under section 3 of the Act; (e) “contro!” 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; () “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 2 Proviso substituted by the SEBI (Substantial Acquisition of Shares and Takeovers) (Third Amendment) Regulations, 2015, w-e-f. 4-8-2015. Prior to its substitution, said Proviso, as inserted by the SEBI (Listing of Specified Securities on Institutional Trading Platform) Regulations, 2013, w.e.£ 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 aver @ company listed on the instimutional trading platform of a recognized stock exchange > Substituted by the SEBI (Substantial Acquisition of Shares and Takeovers) (Amendment) Regulations, 2021, w.e.£ 08.05.2021. Prior to its substitution, it read as, “institutional trading platform”. Page 2 of 77*[(fa) (2) ao the option of the holder of the security, and includes convertible debt instruments and convertible preference shares; “Delisting Regulations” means the Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 202 “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; “entenprise value” means the value calculated as market capitalization of a company plus debt, minority interest and preferred shares, minus total cash and cash equivalents; “financial year” means the period of twelve months commencing on the first day of the month of April; “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 ‘[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; S{[(ja) “fugitive economic offender” shall mean an individual who is declared a fugitive economic offender under section 12 of the Fugitive Economie Offenders Act, 2018 (17 of 2018)] 4 Inserted by the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) (Third Amendment) Regulations, 202; © Substituted by the SEBI (Substantial Acquisition of Shares aud Takeovers) (Second Amendment) Regulations, 2018, w.e f 11-09-2018, Prior to the amendment, it read as “is made Inserted by the SEBI (Substantial Acquisition of Shares and Takeovers) (Second Amendment) Regulations, 2018, wef. 11-09-2018, wee, 6-12-2021 Page 3 of 77(k) “identified date” means the date falling on the tenth working 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; () “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; 7[(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 ease 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 “Inserted by the SEBI (Substantial Acquisition of Shares and Takeovers) (Second Amendment) Regulations, 2018, wef. 11-09-2018, Page 4 of 77persons acting in concert with other persons within the same category, unless the contrary is established, — (i) 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; (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 nual 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; “{(vitia) an alternative investment fund and its sponsor, trustees, trustee company and manager:] x) of" (x) a merchant banker and its client, who is an acquirer; (xi) a portfolio manager and its client, who is an acquirer; (aii) banks, financial advisors and stock brokers of the aequirer, 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 S Juserted by the SEBI (Alteruative Investment Funds) Regulations, 2012, w.e.f 21 9 Omitted by the SEBI (Foreign Portfolio Investors) Regulations, 2014, w.ef 7-1 item (ix) read as under = "(ix) a foreign institutional investor and its sub-accounts:" Page Sof 77 2012. 014. Prior to its omission,banking services or activities in relation to an open offer under these regulations; (iii) 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; (©) _ partnership firm in which such person or his immediate relative is a partner; and (@) members of Hindu undivided families of which such person is a coparcener; (©) “[-postal ballot” means a postal ballot as provided for under Rule 22 of the Companies (Management and Administration) Rules, 2014 made under 013;] (s) “promoter” has the same meaning as in the Securities and Exchange Board the Companies Act. of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 and includes a member of the promoter group; © Substituted by the SEBI (Substantial Acquisition of Shares and Takeovers) (Second Amendment) Regulations, 2018, w.e-f 11-09-2018. Prior to the amendment, the clause read as: (2) “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)" Page 6 of 77® (u) w) (w) @® ” @ “promoter group” has the same meaning as in the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009; “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; “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; “specified” means as specified by the Board; “state-level financial institution” means a Financial Corporation established under section 3 or section 3A 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; “stock exchange” means a stock exchange which has been granted recognition under section 4 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956); “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, whose shares are listed ona 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; Page 7 of 77(zb) “volume weighted average market price” means 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; (ze) “volume weighted average price” means the product of the number of equity shates bought and price of each such equity share divided by the total number of equity shares bought; (2d) “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; “[(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;] “f(zf)]_ “working day” means any working day of the Board. 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 [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 Substantial acquisition of shares or voting rights. 3. (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 "Inserted by the SEBI (Substantial Acquistion of Shares and Takeovers) (Second Amendment) Regulations, 2016, wee 25.05.2016 Clause (ze) reaumbered as clause “(2H)” by the SEBI (Substantial Acquisition of Shares and Takeovers) (Second Amendment) Regulations, 2016, w.c-£ 25-05-2016. ® Substituted by the SEBI (Substantial Acquisition of Shares and Takeovers) (Second Amendment) Regulations, 2018, wef 11-09-2018, Prior tothe amendment, it read as “Companies Act, 1956 (of 1956)" Page 8 of 77@Q Inserted wef 16.0 "STnserted. wed 31-0! 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. No acquirer, who together with persons aeting in concert with im, has acquired and holds in accordance with these regulations shares or voting rights in a target company entitling them to exercise 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 exereise 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: 24[Provided that the acquisition beyond five per cent but upto ten per cent of the voting rights in the target company shall be permitted for the financial year 2020-21 only in respect of acquisition by a promoter pursuant to preferential issue of equity shares by the target company. Provided that such acquirer shall not be entitled to acquire or enter into any agreement to acquire shares or voting rights exceeding such number of shares as would take the aggregate shareholding pursuant to the acquisition above the ‘maximum permissible non-public shareholding. 15[Provided further that, acquisition pursuant to a resolution plan approved under section 31 of the Insolveney and Bankruptey 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, — by the SEBI (Substantial Acquisition of Shares and Takeovers) (Amendment) Regulations, 2020, 16-2020. by the SEBT (Substantial Acquisition of Shares and Takeovers) (Amendment) Regulations, 2018, 5-2018, Page 9 0f 77(i) gtoss 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 fiesh issue of shares by the target company. (Gi) 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 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 of shares or voting rights of a company by the promoters or 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.] 17[(5) For the purpose of this regulation, any reference to “twenty-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”.] Acquisition of control. 4 Irrespective of acquisition or holding of 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. "Inserted by the SEBI (Substantial Acquisition of Shares and Takeovers) (Amendment) Regulations, 2016, wee IT. 2016. "Inserted by the SEBT (Substantial Acquisition of Shares and Takeovers) (Amendment) Regulations, 2021, wef 05.0! 5-202. Page 10 of 77Indirect acquisition of shares or control. 5 a 2) 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. Notwithstanding anything contained in these regulations, in the ease 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 (o) of this sub-regulation, the market capitalisation of the target company shall be taken into account on the bas 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 th jention 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 sueh period. Page 11 of 771*(Delisting Offer. $A. (1) Notwithstanding anything contained in these regulations and the Delisting Regulations, in the event the acquirer makes a public announcement of an open offer "8 Substituted by the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) (Third Amendment) Regulations, 2021, we f. 6-12-2021. Before substitution, regulation SA read as follows: “Delisting offer. 54, (1) Notwithstanding ansthing contained in these regulations, inthe 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 ofthe Securities and Exchange Board of India Delisting of Equity Shares) Regulations, 2008: Provided thar the acquirer shail have declared upfront his imention to so delist atthe time of making the detailed public statement and a subsequent declaration of delisting for the purpose of the affer proposed to be made under sub regulation (1) wilt not sufce. (2) Where an offer made wider sub-reguiation (1) isnot successfi.- () on account of non-receipt of prior approval of shareholders in terms of clause (b) of sub= regulation (1) ofregulation 8 of Securities and Exchange Board of india (Delisting of Equity Shares) Regulations, 2009; or (ii) in terms of regulation 17 of Securities amd Exchange Board of India (Delisting of Equity Shares) Regailations, 2009; or (ii 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 tndia (Delisting of Equity Shares) Regulations, 2009, the acquirer shall make an armouncement within nwo working das tn respect of such failure tn all the newspapers in which the detailed public statement was made and shail comply with all applicable provisions of these regulations (3) In the event of failure of the delisting affer made under sub-regulation (1), the open offer obligations shall be fulfilted by the acquirer inthe following manne: G) the acquirer, through the manager to the open offer, shall within five working das from the date ofthe announcement under subregulation (2), file with the Board, a draft ofthe lener of fer cas specified in sub-reguiation (1) of regulation 16; and Gi) shall comply with all other applicable provisions ofthese regulations Provided that the offer price shall stand enhanced by an amount equal to a sun determined at the rate often per cent per annumfor the period between the scheduled date of payment af consideration to the shareholders and the actual dete of payment of consideration 1 the shareholders Explanation: For the purpose of this sub-regulation, scheduled date shail be the date on which the payment of consideration ought to have Been made tothe shareholders in terms of the timelines In these regulations. (4) Where a competing offer is made in terms of sub-regutation (1) of regulation 20.- (a) the acquirer shall not be entitled to delist the company: (6) the acquirer shall not be liable fo pay interest fo the shareholders on account of delay due to competing offer: (6) the acquirer shall comply with al the applicable provisions of these regulations and make an ‘nmouncement inthis regard, within two working days from the date of public armouncement made tn terms of sub-regulation (1) of regulation 20, tall the newspapers in which the derailed public statement was made, (5) Shareholders who have tendered shares in acceptance af the offer made under sub-regulation (D, shall be entitled to withdraw such shares tendered, within 10 working dys from the date ofthe camouncement under sub-regulation (2) (6) Shareholders who have not tendered their shares in acceptance of the offer mate under sub- regulation (1) shall be ented to tender their shares tn acceptance of the offer made under these regulations.” Page 12 of 77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 /indireetly 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 ifthe open offer is for an indireet acquisition that is not a deemed direct acquisition under sub-regulation (2) of regulation 5, the open offer price Page 13 of 77(b) 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. Explanation: Indicative price shall be in accordance with clause (0) 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. in case the response to the offer leads to the delisting threshold as provided under regulation 21 of the Delisting Regulations : (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: fa) () ©) on account of the non-receipt of the prior approval of shareholders in tems of regulation 11 of the Delisting Regulations; or on account of non-receipt of the prior in-prineiple approval of the relevant stock exchange in terms of regulation 12 of the Delisting Regulations; or 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 witich the detailed public statement was made and comply with all the applicable provisions of these regulations in relation to completing of the open offer. rage 1801 11(4) Where a competing offer is made in terms of sub-regulation (1) of regulation 20 of (a) (b) ©) these regulations: the acquirer shall not be entitled to delist the target company; the acquirer shall not be liable to pay interest to the shareholders on account of delay due to the competing offer; and 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) (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 non-public shareholding threshold: fa) 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 non-public 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. 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). Page 18 of 77(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.} Voluntary Offer. 6. (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 maxinmam 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 hhim 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 make a public announcement of an open offer for acquiring shares under this regulation 419/The relaxation from the first proviso is granted till March 31, 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 "Inserted by the SEBI (Substantial Acquisition of Shares and Takeovers) (Amendment) Regulations, 2020, wee 16-06-2020, Page 16 of 77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 fom 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. 7°[(4) For the purpose of this regulation, any reference to “twenty-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”.] 2[6A. Notwithstanding anything contained in these regulations, no 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.] 22(6B. Notwithstanding anything contained in these regulations, no person who is a fugitive economie 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.] Offer Size. 7. (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 Inserted by the SEBI (Substantial Acquisition of Shares and Takeovers) (Amendment) Regulations, 2021, wee.t 05-05-2021. 2 Inserted by the SEBI (Substantial Acquisition of Shares and Takeovers) (Second Amendment) Regulations, 2016, we. 25-05-2016. ® Inserted by the SEBI (Substantial Acquisition of Shares and Takeovers) (Second Amendment) Regulations, 2018, we. 11-09-2018, Page 17 of 77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 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 * 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 ft: 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 event the 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 ® Substituted by the SEBI (Substantial Acquisition of Shares and Takeovers) (Second Amendment) Regulations, 2018, we.f. 11-09-2018, Prior to this, it read as “total shares of”. Page 18 of 77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 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 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 * Inserted by the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) (Third Amendment) Regulations, 2021, w.e-£ 6-12-2021 Page 19 of 77Explanation 1: The acquirer who is undertaking a seale down shall not, in such target company during the preceding two years from the date of the public announcement, be (i) apromoter/ 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[(5) Subject to regulation 5A, 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 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. Offer Price. 8, (1) The open offer for aequiring 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. Substituted by the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) (Third Amendment) Regulations, 2021, w.e-f 6-12-2021. Before substitution, sub-regulation 5 read as follows: (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 nwelve months has elapsed from the date of the completion of the offer period. Page 20 of 77(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 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 votume-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; *[Provided that the price determined as per clause (4) shall uot apply in the case of disinvestment of a public sector undertaking by the Central Government or a State Government, as the ease may be: Provided further that this proviso shall apply only in ease of a change in control in the public sector undertaking.] (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 Inserted by the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) (Amendment) Regulations, 2022, w.e£. 9-11-2022, Page 24 of 778) (1) the per share value computed under sub-regulation (5), if applicable, 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 annonncement of an open offer; the volume-weighted average price paid or payable for any acquisition, whether by the acquirer or by a y person acting in concert with him, during the fifty-two weeks immediately preceding the earlier of, the date on whieh 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; (©) 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 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 publie 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 aequisition 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 sue shares are frequently traded; Page 22 of 77*"[Provided that the price determined as per clause (e) shall not apply in the case of disinvestment of a public sector undertaking by the Central Government or a State Government, as the case may be: Provided further that this proviso shall apply only in case of a change in control in the public sector undertaking:] and (8) 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 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. Esplanation.— For the purposes of computing the percentages referred to in clause (¢) of this sub-regulation, the market capitalisation of the target company 2 Inserted by the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) (Amendment) Regulations, 2022, w.e£. 9-11-2022, Page 23 of 77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 specifi 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 shal include any price paid or agreed to be paid for the shares or voting rights in, or control over the target compan} y. 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 subseription 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 third working 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 fo rights issue, bonus issue, stock consolidations, stock splits, payment of dividend, de-mergers and reduction of capital, where the record Page 24 0f 77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 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 aequirer 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 °* [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 priee 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 mininmum 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 wiiich the primary acquisition is contracted or the date on which the intention or the decision to make the primary acquisition is Substituted for “Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009”, by the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) (Third Amendment) Regulations, 2021, wef. 6-12-2021 Page 25 of 77announced in the public domain, and the date of the detailed public statement, provided such period is more than five working 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 publie 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 represents to the price parameter computed under clause (4) 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 carying 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. Mode of payment. 9. (1) The offer price may be paid, — (a) incash; Page 26 of 77(b) © dd) @ by issue, exchange or transfer of listed shares in the equity share capital of the acquirer or of any person acting in concert; 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; 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 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: Provided further 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. For the purposes of clause (b), clause (d) and elause (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, — (@) such class of shares are listed on a stock exchange and frequently traded at the time of the public announcement; Page 27 of 77(b) such class of shares have been listed for a period of at least two years preceding the date of the public announcement; (©) 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 [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 °[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 (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 aecept payment in cash or by way of securities, or a combination thereof, the priving 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 later than the commencement of the tendering period: ® Substituted by the SEBI (Substantial Acquisition of Shares and Takeovers) (Second Amendment) Regulations, 2018, we.f, 11-09-2018. Prior to this, it read as “listing agreement”, 2 Ibid Page 28 of 77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 (©) 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 sub-section (1A) of Section 81 of the * [Companies Act, 2013 (18 of 2013)]. General exemptions. 10. (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, — 3 Substituted by the SEBI (Substantial Acquisition of Shares and Takeovers) (Second Amendinent) Regulations, 2018, w-e-£ 11-09-2018. Prior to this, it read as “Companies Act, 1956 (1 of 1956)" Page 29 0f 77(i) Gi) (iii) (iv) «© immediate relatives; persons named as promoters in the shareholding pattem filed by the target company in terms of the [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; 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 subsidiaries subject to control over such qualifying persons being exclusively held by the same persons; *3[Explanation: For the purpose of this sub-clause, the company shall include a body corporate, whether Indian or foreign.] persons acting in concert for not less than three years prior to the proposed acquisition, and disclosed as such pursuant to filings under the * [listing regulations or as the case may be, the listing agreement]: 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 **[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: % substituted by the SEBI (Substantial Acquisition of Shares and Takeovers) (Second Amendment) Regulations, 2018, w.e-£ 11-09-2018. Prior to this, it read as “listing agreement” Inserted by the SEBI (Substantial Acquisition of Shares and Takeovers) (Second Amendment) Regulations, £ 11-09-2018, % substituted by the SEBI (Substantial Acquisition of Shares and Takeovers) (Second Amendment) Regulations, 2018, we.f, 11-09-2018. Prior to this, it read as “listing agreement”. Page 30 of 77Provided that for purposes of availing of the exemption under this clause, (i) Ifthe 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.— @ (ii) ii) 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; a stock broker registered with the Board on behalf of his 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; 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; Page 31 of 77(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) @ merchant banker registered with the Board acting as a stabilising agent or by the promoter or pre-issue shareholder in tems 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. (©) 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 (i) 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, Page 32 of 77pursuant to an order of a court [or a tribunal]** [***}"under any Jaw 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 ot demerger, pursuant to an order of a court “for a tribunal] or [***] 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. “°[(da) acquisition pursuant to a resolution plan approved under section 31 of the Insolvency and Bankruptey Code, 2016 (31 of 2016):] (e) acquisition pursuant to the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Laterest Act, 2002 (54 of 2002); ““{(f) acquisition pursuant to the provisions of the Delisting Regulations] (g) acquisition by way of transmission, succession or inheritance: Inserted by the SEBI (Substantial Acquisition of Shares and Takeovers) (Amendment) Regulations, 2017, wef 148.2017. 5 Words “or a competent authority” omitted by the SEBI (Substantial Acquisition of Shares and Takeovers) (Amendment) Regulations, 2019, w.e.£ 29.03.2019. 5 Inserted by the SEBI (Substantial Acquisition of Shares and Takeovers) (Amendment) Regulations, 2017, weed 148.2017. 3 Words “or a competent authority” omitted by the SEBI (Substantial Acquisition of Shares and Takeovers) (Amendment) Regulations, 2019, w-e.f 29.03.2019. © Inserted ibid + Substituted by the Securities and Exchage Board of India (Substantial Acquisition of Shares and Takeovers) (Third Amendment) Regulations, 2021, we £. 6-12-2021. Before substitution, clause (f) read as follows: ‘(acquisition pursuant to the provisions of the Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009:* Page 33 of 77(h) acquisition of voting rights or preference shares carrying voting rights arising out of the operation of “(sub-section (2) of section 47 of the Companies Act, 2013 (18 of 2013)]. “8[(@) Acquisition of shares by the lenders pursuant to conversion of their debt as part of a debt restructuring [**]" implemented in accordance with the guidelines specified by the Reserve Bank of India: [Provided that the conditions specified under sub-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” shall mean all scheduled commercial banks (excluding Regional Rural Banks) and All India Financial Institutions}'® [Gay 75] ® substituted by the SEBI (Substantial Acquisition of Shares and Takeovers) (Second Amendment) Regulations, 2018, wef. 11-09-2018, Prior to this, it read as “sub-section (2) of section 87 of the Companies Act, 1956 (1 of 1956)". © Substituted by the SEBI (Substantial Acquisition of Shares and Takeovers) (Amendment) Regulations, 2017, w.ef 148.2017. 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 Seheme ~ Aequisttion of equity shares by the consortium of bans, financial institutions and other secured lenders pursuant to conversion of thelr 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.” The word “scheme” omitted by the SEBI (Substantial Acquis Regulations, 2019, we f 29.03.2019. © Substituted by the SEBI (Substantial Acquisition of Shares and Takeovers) (Amendment) Regulations, 2019, w.e.f 29.03.2019. Prior to its substitution, the proviso read as follows,- “Provided that the conditions specified under sub-regulation (5) of regulation 70 of the Secusities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 are ‘complied with.” Inserted by the SEBI (Substantial Acquisition of Shares and Takeovers) (Amendment) Regulations, 2019, w.e£29.03.2019. © Inserted ibid + Omitted by the SEBI (Substantial Acquisition of Shares and Takeovers) (Amendment) Regulations, 2019, ‘wef 29.03.2019, Prior to its omission, clause (ia) read as follows,- “Acquisition of shares by the person(s), by Way of allotment by the target company or purchase from. the lenders atthe time of lenders selling their shareholding or enforcing change in ownership in favour Page 34 0f 77 ion of Shares and Takeovers) (Amendment)“8((j) increase in voting rights arising out of the operation of sub-section (1) of section 106 of the Companies Act, 2013 or pursuant toa forfeiture of shares by the target company, undertaken in compliance with the provisions of the Companies Act, 2013 and its articles of association.] @) [ of such person(s), pursuant to a debt restructuring scheme implemented in accordance with the sidelines 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 ofthe Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 are complied with Provided further that in respet of acquisition by way of purchase of shares from the lenders, the acquisition shall be exempted subject to the compliance with te following concitions: (a) the guidelines for determining the purchase price have been specified by the Reserve Bank of lia and thatthe purchase price has been determined in accordance with such guidelines: (b) the puschase price shall be certified by wo independent qualified vahurs, and for this purpose “valuer’ shall be a person who is registered under section 247 of the Companies Act, 2013 andthe relevant Rules framed thereunder: Provided that rill 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 tea years: (©) the specified securities so purchased shall be locked-in for a period of at least three years from the dae of purchase: (4) the lock-in of equity shares acquired pursuant to conversion of convertible securities purchased from the lenders shall be reduced to the extent the converible securities have already been locked-in (¢) special resolution has been passed by sharcholders ofthe issuer before the purchase: (f) the issuer shal, in addition to the disclosures required under the Companies Act, 2013 or any other applicable lav, disclose the following information pertaining to the proposed acquirers) in the explanatory statement to the notice forthe general meeting proposed for passing special resolution as stipulated at clause (e) ofthis sub-regulation a. the identity including ofthe natural persons who are the ultimate beneficial owners of the shares proposed to be purchased and/ or who ultimately control the proposed acquirers) the business mod ‘a statement on growth of business over the petiod of time: summary of audited financials of previous three financial years track recordin tuming around companies, if any the proposed roadmap for effecting tunaround of the issuer; applicable provisions ofthe Companies Act, 2013 are complied with.” * Inserted by the SEB Substantial Acquistion of Shares and Takeovers) (Four Amendment) Regulations, 2015, wef, 15. ® Omitted by the SEBI (Substantial Acquisition of Shares and Takeovers) (Amendment) Regulations, 2019, ‘we. 29.03.2019. Prior to its omission, sb-tegolation (2) read as fllows,~ ‘The acquisition of shares ofa target company, not involving a change of control over such target company, pursuant to a scheme of comporate debt restructuring in terms of the Corporate Debt Restructusing Scheme notified by the Reserve Bank of India vide circular no. BP-BC 15/21.04, 1142001 dated Angust 23, 2001, or any modification or re-potification 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” Page 38 of 77(2A) An increase in the voting rights of any shareholder beyond 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,] [(2B) Any acquisition of shares or voting rights or control of the target company by way of preferential issue in compliance with regulation 164A 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 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.] @) 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, pursuaat to buy-back of shares [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 [ofthe 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,— 5 Jaseted by the SEBI Substantial Acquisition of Shares and Takeovers) (Second Amendment) Regulations, 2019, we 29-07-2019, 5 Inserted bythe SEBI(Substatisl Acquisition of Shares and Takeovers) (Second Amendment) Regulations 2020, we. 22-06-2020 * laseted by the SEBUSubstatal Acquistion of Shares and Takeovers) (Amen!) Regulations, 2013, ated foro which he voting hss ners by the SEBHSubstatal Acquisition of Shares an Takeovers) (Amendment) Regulations, 2013, w.e-. 26-03-2013, Page 36 0f 77(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 (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: (©) increase in voting rights in a target company of any shareholder pursuant to buy- back of shares: Provided that,— Page 37 of 77(i) such shareholder has not voted in favour of the resolution authorising the buy-back of securities under “(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, (ii) 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 *[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: 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 *"[of closure of the buy-back offer by the target company], the shareholder shall be exempt from the obligation to make an open offer; (@)_ 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; # Substitued by the SEBI (Substantial Acquisition of Shares and Takeovers) (Second Amendment) Regulations, 2018, wef. 11-09-2018. Prior to this, it read as “section 77 of the Companies Act, 1956 (1 of 1956)." % Substituted by the SEBI (Substantial Acquisition of Shares and Takeovers) (Second Amendment) ‘Regulations, 2018, w.e-, 11-09-2018, Prior to ths, it read as “section 77A of the Companies Act, 1956 (1 of 1956)." 57 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, Page 38 of 77(f) acquisition of shares in a target company from a venture capital fund “*[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 **[or category I Altemative 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 four working days prior to the proposed acquisition, and the stock exchange shall forthwith disseminate such information to the public (6) _Inrespect 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 pursuant to exemption provided for in clause (a) of sub-regulation (1), sub-clause (iii) of clause (d) of sub- regulation (1), clause (bi) of sub-regulation (1), sub-regulation (2), sub-regulation (3) and clause (c) of sub-regulation (4), clauses (a), (b) and (£) 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 5 Inserted by the SEBI (Alternative Investment Funds) Regulations, 2012, we f 21-05 Ibid © Suistituted by the SEBI (Payment of Fees) (Amendment) Regulations, 2023, w.e-f 01-04-2023. Prior to its substiution, the sub-regulation read as under: ‘(7 In respect of any acquisition of or increase in voting rights pursuant to exemption provided for in clause (@) of sub-regulation (1), sub-clause (ii) of clause (4) of sub-tegulation (1), clause (h) of sub-regulation (1), sub-rezulation (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 report in such form as may be specified along with supporting documents to the Board giving all details in respect of acquisitions, slong with a non-refundable fee of rupees *[one lakh fifty thousand] **[by way of direct credit in the bank account through NEFT/RTGSIIMPS 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.” * [Substituted by the SEBI (Payment of fees) (Amendment) Regulations, 2014 we.f, 23-05-2014, for the ‘words “twenty five thousand."] *4flnserted by the SEBI (Payment of Fees and Mode of Payment) (Amendment) Regulations, 2017, wef 63.2017] 2012. Page 39 of 77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.] 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. Exemptions by the Board. 11.) The Board may for reasons recorded in writing, grant exemption from the obligation to make an open offer for acquiring shar 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 Page 40 of 77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 TV 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 swom affidavit, giving details of the proposed acquisition and the grounds on which the exemption has been sought. (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 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. Substituted by the SEBI (Payment of Fees) (Amendment) Regulations, 2023, w.e-f 01-04-2023, Prior to its substitution, the sub-regulation read as under: *(4) The acquirer or the target company, as the case may be, shall along with the application referred to under sub-tegulation (3)pay a non-refundable fee of rupees *[five lakh], *Mfby way of direct credit in the bank account through NEFT/RTGS IMPS or auy other mode allowed by RBI or] by way ofa banker's cheque or demand draft payable in Mumbai in favour of the Board.” * [Substituted for the words #{"three lakh”] by the SEBI (Payment of Fees and Mode of Payment) (Amendment) Regulations, 2017, wee.t. 6-3-2017. *[ Inserted by the SEBI (Payment of Fees and Mode of Payment) (Amendment) Regulations, 2017, w.el 6-3-2017] {Substituted for the words “fifty thousand” by the SEBI (Payment of fees) (Amendment) Regulations, 2014 we 23.05.2014] Page 41 of 77(6) The order passed under sub-regulation (5) shall be hosted by the Board on its official website. CHAPTER - TIT OPEN OFFER PROCESS ‘Manager to the open offer. 12. (1) 2) Timing. 13. (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. 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 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. Such public announcement — (a) _ inthe ease 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 aequiring 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; Page 42 of 77(©) 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 compar (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) _ inthe 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; (£) inthe 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; (2) 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 “[the board of directors of the target company authorises such preferential issue.}; (i) the public announcement pursuant to an increase in voting rights consequential to a buy-back not qualifying for exemption under © 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, Page 43 of 77regulation 10, shall be made not later than the ninetieth day from the date of [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 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 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 aequirer 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 © Substituted for “such increase in the voting rights beyond the relevant threshold stipulated in regulation 3° by the SEBI(Substautial Acquisition of Shares and Takeovers) (Amendment) Regulations, 2013, w.e.l 2 2013. Inserted by the SEBI(Substantial Acquisition of Shares and Takeovers) (Amendment) Regulations, 2013, weed 2603-2013, Page 44 0f 77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, Publication. 14. (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 publie. (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 Janguage 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 (4) Simultaneous! y 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. Contents. Page 45 of 7715. (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; () the offer price, and mode of payment of consideration; “[***] (®) offer size, and conditions as to minimum level of acceptances, “[if any; and] [(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 5A, the proposed open offer price and indicative price as required under regulation 5A 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. Filing of letter of offer with the Board. 16. (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 © The word “and” omitted by Securities and Exchange Board of India (Substantial Acquistion of Shares and Takeovers) (Third Amendment) Regulations, 2021, wel 6-12-2021 Substituted for “if any.” by the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) (Third Amendment) Regulations, 2021, w.e f. 6-12-2021 Inserted by the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) (Third Amendment) Regulations, 2021, we.f, 6-12-2021 Page 46 0f 77to the open offer, file with the Board, a draft of the letter of offer containing such information as may be specified along with a non-refundable fee, as per the following scale, [by way of direct credit in 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] — ~% SI. | Consideration payable Fee (Rs) No. | under the Open Offer a. | Upto ten crore rupees, Five lakh rupees (Rs. 3,00,000) b. | More than ten crore rupees, | 0.5 per cent of the offer size but less than or equal to one thousand crore rupees. Inserted by the SEBI (Payment of Fees and Mode of Payment) (Amendment) Regulations, 2017, wef. 6 2017. © Substituted by the SEBI Payment of fees) (Amendment) Regulations, 2023 w.e.£ 01-04 “any other mode allowed by RBI or by way ofa banker's cheque or demand draft payable in Mumbai in favour of the Board Substituted by the SEBT (Payment of fees) (Amendment) Regulations, 2014 w.e.t 23-05-2014. Prior to its substitution, the table in sub-regulation (1), read as under, SI No. ‘Consideration payable under the Open Offer Fee Bs) Upto ten crore rupees ‘One lakh twenty five thousands mipees (€ 000) ‘More than ten crore rupees, but less than or equal to one thousand crore rupees. One lakh ‘wenty five thousands rupees (© 41.25,000) plus 0.025 per cent of the portion ofthe offer size in excess of ten crore rupees (%10,00,00,000) More than oue thousand crore rupees, but less than or equal to five ‘thousand erore rupees ‘One crore twenty five lakh rupees ( © 1,25,00,000) plus 0.03125 per cent of the portion of the offer size in excess of one thousand crore rupees (® 1000,00,00,000) More than five thousand crore rupees. Two crore fifty lakh mpees (€ 2,50,00,000) pplus 0.01 per cent of the portion of the offer size in excess of five thousand crore rupees ( ¥ 5000,00,00,000), subject to a maximum of Page 47 of 77 thuee crore rupees (3,00,00,000).B) (@) ©. | More than one thousand crore | Five crore rupees (RS. 5,00,00,000) rupees plus 0.125 per cent of the portion of the offer size in excess of one thousand crore rupees (41000,00,00,000).. 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, imespective 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. 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. 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. Page 48 of 77Provided further that in the event the Board specifies any 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) Inthe 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) Provision of escrow. 17. (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: SI. | Consideration payable under | Escrow Amount No. | the Open Offer a. _ | On the first five hundred crore | an amount equal to twenty-five per cent of rupees the consideration b. | Onthe balance consideration | an additional amount equal to ten 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 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 pet cent of the consideration payable in the open offer shall be deposited in the escrow account.] 1 Inserted by the SEBI (Substantial Acquisition of Shares and Takeovers) (Third Amendment) Regulations, 2020, wee. 01-07-2020. Page 49 of 77) 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. 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 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 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] *S[Explanation: The cash component of the escrow account as referred to in clause (a) above may be maintained in an interest beating account, subject to the merchant banker ensuring that the funds are available at the time of making payment to the shareholders. 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. 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 ® Inserted by the SEBI (Substantial Acquisition of Shares and Takeovers) (Third Amendment) Regulations, 2020, wee. 01-07-2020. Inserted by the SEBT (Substantial Acquisition of Shares and Takeovers) (Second Amendment) Regulations, 2018, we. 11-09-2018, Page $0 of 77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 eserow 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 sharehiolders who have tendered their shares in acceptance of the open offer, save and except for transfer of funds to 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 aequirer 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 (¢) 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; (©) 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 Page S1 of 77