Securities And Exchange Board Of India - Subsection
Section 10(4) in Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011
(4)The following acquisitions shall be exempt from the obligation to make an open offer under sub-regulation (2) of regulation 3,-(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(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:(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,-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:(c)increase in voting rights in a target company of any shareholder pursuant to buy-back of shares:Provided that,-(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)] [Substituted 'section 77A of the Companies Act, 1956 (1 of 1956)' by Notification No. SEBI/LAD-NRO/GN/2018/33, dated 11.9.2018 (w.e.f. 23.9.2011).];(ii)in the case of a shareholder resolution, voting is by way of postal ballot;(iii)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)] [Substituted 'section 77A of the Companies Act, 1956 (1 of 1956)' by Notification No. SEBI/LAD-NRO/GN/2018/33, dated 11.9.2018 (w.e.f. 23.9.2011).]; 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] [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.], the shareholder shall be exempt from the obligation to make an open offer;(d)acquisition of shares in a target company by any person in exchange for shares of another target company tendered pursuant to an open offer for acquiring shares under these regulations;(e)acquisition of shares in a target company from state-level financial institutions or their subsidiaries or companies promoted by them, by promoters of the target company pursuant to an agreement between such transferor's and such promoter;(f)acquisition of shares in a target company from a venture capital fund [or category I Alternative Investment Fund] [Inserted by the SEBI (Alternative Investment Funds) Regulations, 2012, w.e.f 21-05-2012.] 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 Alternative Investment Fund] [Inserted by the SEBI (Alternative Investment Funds) Regulations, 2012, w.e.f 21-05-2012.] or foreign venture capital investor and such promoters.
