Exemptions Under The Takeover Code

The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 ("Regulations") govern the transaction relating to acquisition of shares of a target company (listed company in India), where undertaken by an existing shareholder of the company or any other independent acquirer company. The purpose of the Regulations is to regulate the acquisition of shares or voting rights (directly or indirectly) or takeover of the 'control' of the target company and ensure that the said acquisition is done in a fair and transparent manner. For instance, Regulations 3 and 4 of the Regulations ensures that a public announcement of an open offer is made, prior an acquisition of the shares of a target company beyond a certain threshold. This open offer is made to the existing shareholders of the target company, so that they may have a fair exit opportunity in case of a substantial change of control or shareholding in the company.