Definition of Frequently Traded Shares and Calculation of Weighted Average Number of Total Shares

As per the Securities And Exchange Board Of India (Substantial Acquisition Of Shares And Takeovers) Regulations, 2011 Frequently Traded Shares means shares of a target company, in which the traded turnover on any stock exchange during the 12 calendar months preceding the calendar month in which the public announcement is required to be made under these regulations is at least ten percent of the total number of shares of such class of the target company;

For example, Public announcement has been made on February 5, 2019, then will see the traded turnover from February 1st, 2018 to January 31st, 2019. NSE and BSE always displayed the traded turnover of the listed company on their exchange.

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;

In continuation of the above example if total shares of the company on February 1, 2018, is 6,00,00,000 and on November 1, 2018, company allotted 3,00,00,000 shares more so now total shares is 9,00,00,000.

As we see the total shares is not identical throughout the year so we will calculate weighted average of total shares like:

No. of shares Weight Total
6,00,00,000 0.75 (as this is for 9 months)(9/12) 4,50,00,000
9,00,00,000 0.25 (as this is for 3 months)(3/12) 2,25,00,000
Weighted average 6,75,00,000

Author Bio

Qualification: CS
Company: N/A
Location: Hyderabad, Telangana, IN
Member Since: 26 Dec 2017 | Total Posts: 3
Inevitably on the highway to discover solutions for efficient and effective business operations while complying laws View Full Profile

My Published Posts

More Under SEBI

Posted Under

Category : SEBI (3034)
Type : Articles
Tags : SEBI (596)

Leave a Comment

Your email address will not be published. Required fields are marked *