Under Regulation 3(2) of the SEBI (SAST) Regulations,

Solution

This provision is known as the "Creeping Acquisition" limit under Regulation 3(2) of the SEBI (SAST) Regulations, 2011. 1. The Rule (Regulation 3(2))

• Applicability: This rule applies to an acquirer who already holds substantial shares (between 25% and 75%).
• The Allowance: Such an acquirer is allowed to consolidate their holding by acquiring additional shares, provided the acquisition does not exceed 5% of the voting rights in any financial year (April 1 to March 31).
• The Trigger: If the acquirer purchases even a single share that pushes the acquisition for that financial year beyond 5%, they must make a mandatory open offer to the public shareholders.

• Example: If an acquirer buys 3% and sells 1%, their "acquisition" for the purpose of this limit is 3%, not 2%. They cannot net off sales against purchases to stay under the 5% limit.

• 25%: This is the initial trigger under Regulation 3(1) . If a person with 0% holding wants to buy shares, they hit the trigger at 25%.
• 10%: This is the disclosure threshold (SAST disclosures), not the open offer trigger.
• 26%: This is the minimum size of the Open Offer itself (i.e., the acquirer must offer to buy at least 26% of the company from the public).