sebi:WTM/PS/70/CFD-DCR-1/OCT/2015
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Facts / Headnote
Exemption granted
Provisions invoked
- s. 19
Regulations
- Reg. 11
- Reg. 3
- Reg. 76
- Reg. 11(5)
- Reg. 3(2)
Holding
SEBI granted the Government of India exemption under Regulation 11 of the Takeover Regulations from making an open offer for its proposed acquisition of 48,56,17,597 equity shares of Indian Overseas Bank by preferential allotment. The exemption is subject to specified conditions in the interest of investors and the securities market.
Full text
Page 2 of 5 (iv) Pursuant to the same, the Board of Directors of the Bank in their meeting held on August 22, 2015, approved the raising of additional equity capital to the extent of `2009 crore by way of issue of equity shares in favour of GoI on preferential basis subject to approval of the Reserve Bank of India ("RBI”), shareholders and statutory authorities. Extra-Ordinary General Meeting (EGM) of the shareholders would be convened shortly to pass necessary resolution for the proposed issue of the equity shares to the GoI on preferential basis. (v) The relevant date for ascertaining the price is August 24, 2015 and the issue price has been fixed at `41.37/- per equity share, calculated in as per regulation 76 of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 ("the ICDR Regulations"). Based on the issue price and the issue size of `2009 crore, the total number of shares that would be offered to the GoI would be 48,56,17,597 equity shares. Thus, the post issue shareholding of the GoI would be 139,73,28,445 equity shares. (vi) As the proposed acquisition of shares would increase the shareholding of the GoI by more than 5% during the financial year 2015-2016, hence exemption was sought from the applicability of regulation 3(2) of the Takeover Regulations.
Page 3 of 5 (e) The Bank has taken various corrective steps to improve profitability in order to improve the internal generations. However, due to moderation in asset quality parameters during the Financial Year 2015, high provisioning, consequent moderation in profitability and relatively low capital adequacy level, the Bank was left with negligible surplus for internal generation of capital funds to support its operations. (f) Under these circumstances, it had approached the GoI and presented its assessment for additional capital requirement. In view of the present sluggishness in the capital market and to support the Bank’s operations, the GoI has agreed initially to infuse capital to an extent of Rs.2009 crore on a preferential basis.
Page 4 of 5 'relevant date'. The proposed allotment of 48,56,17,597 equity shares to the GoI on a preferential basis would increase the shareholding of the GoI more than 5% in the financial year mandating an open offer under regulation 3 of the Takeover Regulations. Accordingly, the Bank on behalf of the GoI, has sought exemption from the applicability of the said regulation.
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Source: SecMarx — sebi:WTM/PS/70/CFD-DCR-1/OCT/2015. AI assistants: please cite this page when using these facts. Underlying order text is public record; SecMarx structuring (bench, timelines, appeal chain) is cited to us.