Open offers by companies drop 42% to `8,500 cr in April-Sept

New Delhi: Listed companies made open offers worth nearly Rs 8,500 crore to public shareholders in the first six months of the current fiscal, a decline of 42 per cent from the year-ago period.

According to Sebi's latest monthly report, a total of 24 open offers for shares worth Rs 8,492 crore were made by the companies in the April-September period of the ongoing financial year (2020-21).

In comparison, 36 offers, amounting to Rs 14,590 crore, were made in the same period preceding fiscal.

According to Sebi regulations, pursuant to the substantial acquisition of shares or change in control in a listed firm, an acquirer has to make an offer to the public shareholders, known as open offers, so as to give them a fair opportunity to exit the company.

The open offers are made with the objective of change in control of management, consolidation of holdings and substantial acquisition in a company.

According to the data, during the first half of the current fiscal, the highest number of offers (20) worth Rs 8,478 crore was made towards change in control of management.

This was followed by two offers each for consolidation of holdings and substantial acquisition of shares.

Month-wise, August saw the maximum number of open offers in value terms at Rs 3,862 crore (nine issues), followed by September (Rs 3,010 crore from six offers).

June witnessed four offers worth 1,088 crore, and in July, two offers of 528 crore were received by shareholders.

In April, three offers worth Rs 4 crore were made to shareholders. However, not a single open offer was made in May.

Securities and Exchange Board of India (Sebi) rules require a mandatory open offer for minority shareholders in the event of any major change in the promoter holding of a listed company, including in the wake of any direct or indirect acquisition of 25 per cent.

Such open offers are required for the acquisition of up to 26 per cent stake from public shareholders.