Mumbai: Corporate acquisitions in India could become costlier with market regulator Securities and Exchange Board of India (Sebi) mulling making it mandatory for acquirers to make an offer for up to 100% stake in any listed company.
As of now, an open offer for a minimum of 20% in the target company is required to be made by any entity that has purchased 15% equity, either from the promoters or the open market.
Looking into changes: C. Achuthan. Shashank Parade / PTI
The capital markets regulator has set up a Takeover Regulatory Advisory Committee, with former Securities Appellate Tribunal (SAT) presiding officer C. Achuthan as chairman, to look into suitable changes in the existing takeover regulations.
While any changes are expected to take effect from the next fiscal only, the committee is said to be seriously looking at increasing the open offer size from 20% to as high as 100%, while it might also increase the open offer trigger limit from 15%, sources said.
While an increase in open offer size could mean larger cash outgo for the acquirers, the step is being considered in the larger interest of retail and other public shareholders.
As per the current practice, all the public shareholders do not necessarily get an exit option even if the ownership of a company changes hands, as the open offer size need not exceed 20%.