Sebi tightens norms on creeping acquisitions

MUMBAI: Sebi has amended the takeover regulations to tighten the creeping acquisition norms for promoters. An acquirer, as per the amendment, will have to make an open offer to raise stake beyond 55% in a company.

This means that promoters will not be allowed to increase their stake in a company beyond 55% without making an open offer.

Earlier, Sebi’s takeover regulations permitted creeping acquisition up to 75%.
Promoters could increase their holding in a company by buying up to 5% of the company’s equity capital each year and they could take it up to 75% through this route, according to earlier regulation.

Now, an acquirer will not be allowed to acquire shares or voting rights through market purchases or preferential allotment beyond the 55% limit without an open offer.

“No acquirer, along with persons acting in concert (can) acquire more than 55% (from the current 75%) of the shares or voting rights in a company, unless such an acquirer makes a public announcement to acquire shares in accordance with the regulations,� the notification said.