SEBI decision on creeping acquisition limit next week

MUMBAI, OCT. 6. The Securities and Exchange Board of India has sent a circular to its board members, seeking comments on the proposal to temporarily hike the ceiling on the creeping acquisition route for promoters to 10 per cent from 5 per cent in a year and a final decision is expected next week.

The members have given an `in principle' approval for the proposal with some suggestions, which would be taken into consideration before taking a final view and issuing a notification next week, SEBI sources said here today.

The proposed amendment was likely to be in operation for six months ending this fiscal, they said adding, this measure was being considered to improve the investment climate.

This decision would allow promoters and those holding a stake above 15 per cent to acquire an additional 10 per cent holding without triggering the provisions of an open offer according to the SEBI takeover code, they said.

In very few instances, the current 5 per cent cap on creeping acquisition was reached, SEBI sources said.

The value of many scrips was ruling at low levels and in some cases even less than the book value and this might be a better opportunity for the promoters to raise their holdings in the company, analysts said.

The Tata group has used this route to raise its stake in companies like Tata Steel and Telco.

- PTI

Send this article to Friends by E-Mail

Section  : Business
Previous : Cement units bet on housing, highway projects
Next     : Murugappa group gets Distinguished Family
           Business Award