sebi:WTM/RKA/CFD/09/2012
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Facts / Headnote
Exemption granted
Provisions invoked
- s. 19
Regulations
- Reg. 11
- Reg. 11(1)
- Reg. 3(2)
- Reg. 200
- Reg. 11(5)
Holding
SEBI granted exemption to the Government of India from complying with regulation 3(2) with regard to the proposed acquisition of 188,556,509 equity shares of IDBI Bank Ltd. by conversion of Tier I Bonds.
Full text
2 regulation 11, it would trigger mandatory open offer obligation for GoI. The exemption has been sought for reasons given below: a. The GoI and the Reserve Bank of India had given a loan of Rs.2, 130.50 crore to IDBI Bank in the late 90s when IDBI was a Public Financial Institution. This loan was converted into Tier I Bonds, in order to get these funds to qualify as Tier I Capital. This augmented the capital of the IDBI Bank and helped it to meet the prudential norms set under Basel I.
3 5. The application was referred to the Takeover Panel under regulation11 (5) of the Takeover Regulations. After examination of the facts and circumstances stated in the application, the Takeover Panel vide its report dated March 21, 2012 recommended as under: “The panel deliberated on the matter and observed that the capital adequacy of IDBI Bank Ltd. is a key requirement to protect the interest of its customers as well as public shareholders who have invested in its capital. The panel also observed that GoI is agreeable to convert Tier I bonds into equity shares of the bank to enable the bank to meet the prudential norms set under Basel I, as also to provide it with sufficient room, to grow its business. It was also observed that the bonds are being converted at a price of Rs.112.99 per equity share as per pricing worked out in accordance with SEBI pricing formula for preferential allotment. Considering all these aspects, the panel found the proposal in the interest of the public shareholders and other stake holders of the bank and accordingly recommended the grant of exemption under regulation 11(1) from the applicability of regulation 3(2) of Takeover Regulations, 2011.”
4 8. In view of the above findings, I, in exercise of the powers conferred upon me under Section 19 of the Securities and Exchange Board of India Act, 1992 read with regulation 11(5) of Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, hereby grant exemption to the acquirer, Government of India from complying with the requirements of regulation 3(2) of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 with regard to the proposed acquisition of 188,556,509 equity shares by conversion of Tier I Bonds.
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Source: SecMarx — sebi:WTM/RKA/CFD/09/2012. 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.