No Open Offer Required Under Takeover Norms if Promoter’s Holding Doesn’t Increase Post-CCDs and CCPS Conversion | SEBI Informal Guidance

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SEBI Takeover Regulations

SEBI Informal Guidance No. SEBI/HO/CFD/PoD-1/OW/P/2025/2126/1, Dated: 22.01.2025

A listed company sought informal guidance on whether preferential allottees must make an open offer disclosure under Reg 3(2) of the Takeover Regulations upon converting CCDs and CCPS into equity shares. The conversion would result in a 0.96% reduction in shareholding for FY 2026-2027. SEBI clarified that since the conversion would not increase the shareholding of the promoter and its group by 5% and would reduce it, preferential allottees are not required to make an open offer.

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Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied