Ronak Ltd. is a public company listed on BSE. Its share capital is ₹ 2,75,00,000 consisting of 27,50,000 shares of ₹ 10 each. The public holding in the company is 47% of the total shares and rest of 53% shares are held b

CS Professional · Capital Commodity and Money Market · PYQS · December 2018
Ronak Ltd. is a public company listed on BSE. Its share capital is ₹ 2,75,00,000 consisting of 27,50,000 shares of ₹ 10 each. The public holding in the company is 47% of the total shares and rest of 53% shares are held by the promoters and its relatives as on 31-3-2013. The promoters in order to avoid any hostile take over, want to increase their stake by 5% of the total shares in the F.Y. 2013-14 and further want to increase their stake by 5% of total shares in the succeeding F.Y. i.e. 2014-15; 2015-16; 2016-17 and 2017-18 without making any public announcement. The promoters intend to acquire shares as per the guidelines prescribed under the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (Takeover Regulations). In light of the above information, please answer the following questions: Whether the promoters can further acquire 5% additional shares as per Takeover Regulations in each of the F.Y. 2014-15; 2015-16; 2016-17 and 2017-18 till it reaches the level of 75% of the share capital of Ronak Ltd.

Answer & Explanation:

In the given question, it is asked whether the acquirer can acquire five percent (5%) additional shares in each of F.Y. of 2014-15, 2015-16, 2016-17 and 2017-18. Since the Regulation 3(2) of the Takeover Regulations provides that additional shares can be acquired in 'Any Financial Year', hence he can acquire the additional shares as under: Financial Year % of the Holding of the Promoter Whether allowed without making Public Announcement Before F.Y. 2012-13 53% - Already Having Yes 2013-14 53% + 5% = 58% Yes 2014-15 58% + 5% = 63% Yes 2015-16 63% + 5% = 68% Yes 2016-17 68% + 5% = 73% Yes 2017-18 73% + 5% = 78% No Hence the promoters can acquire shares up to the F.Y. 2016-17 without making any public announcement subject to the fulfilment of the other conditions.

Topics: Capital Market

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