The Paid up Equity Share Capital of Zumba Ltd. is 1,00,000 shares of ₹10 each as on 1 st April 2019. The promoters hold 37000 shares as on 1 st April 2018, which is 37% of the paid up capital. The promoters are three sha

Creeping acquisition refers to the process through which the acquirer together with "Person Acting in Concert (PAC) holding more than 25% but less than 75%, to gradually increase their stake in the target company by buying up to 5% of the voting rights of the company in one financial year. In terms of Regulation 3(3) of SEBI (SAST) Regulations, if the individual shareholding of an acquirer after acquisition exceeds 25% or the creeping acquisition limit of 5% in a financial year in the target company, such acquirer needs to make public announcement of an open offer. Evaluation for Zumba Ltd.: Existing Shares: 1,00,000 shares Promoters' existing holding: 37,000 shares (37%) Preferential Allotment: Ram: 7,000 shares Mohan: 1,000 shares Total new shares after preferential allotment: 1,00,000 + 7,000 + 1,000 = 1,08,000 shares Combined Promoters' holding after proposed acquisition: New total shares held by promoters = 37,000 (existing) + 7,000 (Ram) + 1,000 (Mohan) = 45,000 shares Percentage holding = (45,000 / 1,08,000) * 100 = 41.66% The increase in promoter holding is 41.66% - 37% = 4.66%. Since this increase (4.66%) is less than the trigger of 5% for creeping acquisition, there is no need for a public announcement based on the combined promoter holding. Individual Shareholder Analysis: Ram's holding: Existing: 21,000 shares (21%) New shares: 7,000 shares Total shares after allotment: 21,000 + 7,000 = 28,000 shares Percentage holding = (28,000 / 1,08,000) * 100 = 25.92% Since Ram's post-acquisition holding (25.92%) exceeds 25%, Ram has triggered the code and is under an obligation to make a public announcement. Mohan's holding: Existing: 4,000 shares (4%) New shares: 1,000 shares Total shares after allotment: 4,000 + 1,000 = 5,000 shares Percentage holding = (5,000 / 1,08,000) * 100 = 4.63% In the case of Mohan, there is no requirement as it does not cross either 5% (creeping acquisition limit) or 25% of the capital of the target company. However, had there been acquisition by the promoters from dissenting shareholders as per exit offer in terms of Regulation 3(4), there need not be any public announcement.