SEBI Amends SAST Regulations to Mandate Independent Valuation of Infrequently Traded Shares

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  • Last Updated on 8 December, 2025

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SEBI SAST valuation

Notification no. F. No. SEBI/LAD-NRO/GN/2025/283; Dated: 03.12.2025

1. Regulatory Background

The Securities and Exchange Board of India (SEBI) has notified the SEBI (Substantial Acquisition of Shares and Takeovers) (Amendment) Regulations, 2025, updating the valuation and compliance framework applicable to takeover transactions, including open offers. The amendments enhance transparency in pricing, improve investor confidence, and ensure independent valuation where acquisition consideration or traded volume creates pricing ambiguity.

2. Independent Valuation of Infrequently Traded Shares

Under the amended norms, SEBI may require a valuation of infrequently traded shares if:

  • The shares being acquired or transferred do not meet liquidity benchmarks, and
  • Market prices may not accurately reflect fair value due to limited or sporadic trading activity

Key Provision

  • SEBI may direct valuation at the expense of the acquirer
  • The valuation must be carried out by an independent registered valuer

This mechanism protects minority shareholders and ensures that offer prices are fair, transparent, and not distorted by low trading volumes.

3. Valuation of Listed Securities Offered as Consideration

Where the acquirer offers listed securities instead of cash as consideration for the acquisition or open offer:

  • The value of such securities must be certified by an independent registered valuer
  • Certification ensures that the market price reflects genuine fair value, free from anomalies caused by manipulation, temporary volatility, or low float

This provision ensures equitable pricing regardless of the form of consideration.

4. Definition of Valuer Introduced Under Regulation 2

To standardise qualification, accountability, and independence criteria, SEBI has inserted a definition of “valuer” under Regulation 2.

Regulatory Significance

  • Confirms that valuations required under the Takeover Regulations must be undertaken by an independent registered valuer
  • Reinforces credibility, transparency, and governance standards in pricing methodologies used in takeover transactions

5. Regulatory Intent

The amendments strengthen:

  • Price discovery and fairness for minority shareholders
  • Disclosure discipline and valuation integrity
  • Investor protection in complex or non-cash acquisition structures
  • Governance expectations for acquirers structuring open offers, mergers, strategic stake purchases, or indirect acquisitions

They also align the Takeover Regulations with evolving corporate valuation norms and the registered valuer framework under Indian law.

Click Here To Read The Full Notification

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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