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

Yes, the transaction would be covered under creeping acquisition. Regulation 3(2) of SEBI (SAST) Regulations, 2011, deals with creeping acquisition, which allows an acquirer (holding 25% or more but less than the maximum permissible non-public shareholding) to acquire up to an additional 5% of shares or voting rights in a financial year without making an open offer. In this scenario: The promoters' holding increased by 3.95% due to warrant conversion. The proposed gift of 2% to an immediate relative is an additional acquisition by the promoter group (as Vipin is an immediate relative). The cumulative acquisition (3.95% + 2% = 5.95%) exceeds the 5% limit for creeping acquisition in a financial year. Therefore, the transactions, including the proposed transfer, would be considered for the purpose of calculating the creeping acquisition limit of 5%, and since it exceeds this limit, it triggers an open offer obligation unless an exemption applies.