SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 provides mandates that an acquirer shall make a public announcement of an open offer if he is acquiring shares/voting rights, directly or indirectly, which along with his existing holding, will entitle him to exercise more than 25% of voting rights of the target company.

However, the above shall be exempted if the acquisition if pursuant to an inter-se transfer, which is governed under Regulation 10(1)(a) of the SEBI (SAST) Regulations, 2011.

The General exemption in Reg. 10(1)(a) provides that any acquisition of shares pursuant to an inter-se transfer among the qualifying persons shall be exempted from the obligation to make an open offer.

The qualifying persons are-

1.  Immediate Relatives –defined in Reg. 2(l)

―means any spouse of a person, and includes parent, brother, sister or child of such person or of the spouse;

2.  Persons named as promoters in the shareholding pattern filed by the target company for not less than 3 years prior to the proposed acquisition;

3.  Subject to control over the below qualifying persons being exclusively held by the same persons-

  • 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

4. Persons acting in concert for not less than three years prior to the proposed acquisition, and disclosed as such to the exchange.

5. Shareholders of a target company who are falling in the above category of PAC, 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;

However, the General Exemption in the above category can only be claimed if the following conditions are satisfied-

 a. If the shares of the Target Company are frequently traded :-

        The acquisition price per share shall not be higher by more than 25% of the Volume-Weighted Average Market Price for a period of 60 Trading days preceding the date of issuance of notice (refer below) under regulation 10(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,

 b. If the shares of the target company are infrequently traded :-

         The acquisition price shall not be higher by more than 25% of the price determined in   terms of regulation 8(2)(e).

ii. The transferor and the transferee shall have complied with applicable disclosure requirements set out in Chapter V of the regulations, which are-

Regulation 29 of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 provides that:

(1) An acquirer shall, within 2 working days of allotment/acquisition of shares/voting rights, make disclosure to the stock exchange and the Listed company, in the following scenarios, if –

     a. shares/voting rights acquired by him along with PAC(defined in Regulation 2(q)), and including his existing holding, aggregate to 5% or more of the shares of the target company;

      b. the acquirer along with his PAC is holding 5% of more of shares/voting rights and there is a change in shareholding/voting rights which exceeds 2% of the total shareholding/voting rights in the target company;

Other Disclosure:

Disclosure under Regulation 10(5), 10(6) and 10(7) – Intimation/reporting to Stock Exchanges in respect of acquisition under Regulation 10(1)(a) of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011

Disclosed by: Person (Acquirer)

Disclosed to: Stock Exchange (SE)


1. Regulation 10(5)- Prior Intimation-: To be filed with the SE, the details of proposed acquisition- at least 4 working days prior to the date of proposed acquisition.

2. Regulation 10(6)- Subsequent Reporting: To be filed with the SE, a report- not later than 4 working days after acquisition.

3. Regulation 10(7): To be filed within twenty –one working days from the date of acquisition along with supporting documents and a non-refundable fee of Rs.1,50,000/- payable to the Board.

Disclaimer: The views, information or opinions expressed herein are compiled by the Legal team of M&K Associates, Company Secretaries, Hyderabad. The above information is solely for disseminating knowledge and private circulation. We are hereby not liable for any loss, damage or inconvenience caused as a result of reliance on such information and we accept no legal liability or other responsibility by or on behalf of any errors, omissions, or statements on this content.


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One Comment

  1. Trupti Ranjan Mohanty says:

    Is Interse transfer possible if the Company is less then 3 years old.. means.. criteria of promoters for not less then 3 years is not fulfilled.

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October 2021