Explain the term "trigger point" in reference to takeover code. Explain whether the public announcement is required in the following case : The Paid-up Equity Share Capital of A Ltd is 5000 shares as on April 01, 2024. T

By trigger points, it is meant that the threshold levels upon reaching which, an acquirer, either on its own individual account or along with Persons Acting in Concert (PAC) acquiring shares or voting rights in a target company is required to make a public announcement for an open offer and comply with the other provisions of the Takeover Code with regard to an open offer. Let us determine whether there would be a trigger using the methods. Analysis of A's individual shareholding: Current shareholding of A = 1100 shares (22% of 5000 shares) New shares allotted to A = 400 shares Total shares of A after allotment = 1100 + 400 = 1500 shares Total paid-up equity share capital after allotment = 5000 + 400 = 5400 shares Post issue shareholding of A = (1500 / 5400) * 100 = 27.77% Since A's shareholding has crossed the initial threshold limit of 25% as stipulated in Regulation 3(1) of the Takeover Regulations, A has triggered the Code and is under an obligation to make a public announcement. Analysis of promoters' collective shareholding: Promoters' current holding = 2000 shares (40% of 5000 shares) Promoters' holding after allotment (A's shares increase) = 2000 + 400 = 2400 shares Total shares after allotment = 5400 shares Promoters' post-issue holding = (2400 / 5400) * 100 = 44.44% Increase in promoters' collective holding = 44.44% - 40% = 4.44% Since the acquisition by all the promoters together does not exceed 5% in a financial year, there is no trigger based on collective promoter holding increase. However, A's individual holding crossing 25% is the primary trigger for the public announcement.