PQR Ltd. listed its shares in NSE. Its promoters hold 56.5% of paid-up equity share capital as on 31st March, 2022. On 10th October, 2022, some of the promoters who were having convertible warrants in the company, has co

Under Regulation 3(2) of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, an acquirer (who, along with persons acting in concert, holds 25% or more but less than the maximum permissible non-public shareholding) cannot acquire additional shares or voting rights exceeding 5% in any financial year without making a public announcement of an open offer. In this case: The promoter shareholding has already increased by 3.95% due to the conversion of warrants. The proposed gift of 2% of equity shares to an immediate relative (Vipin) would further increase the gross acquisition of shares by the promoter group. The total increase (3.95% + 2% = 5.95%) exceeds the 5% creeping acquisition threshold within the financial year. Therefore, the proposed transfer, when combined with the earlier acquisition through warrant conversion, will trigger an obligation for an open offer unless the promoters fulfill the conditions for exemption under Regulation 10 of the SEBI (SAST) Regulations, 2011.