The market regulator Securities and Exchange Board of India (Sebi) today clarified that promoters and persons acting in concert can increase their stake by 5 per cent only one time and not annually or quarterly as the misconception was. The regulator has also said that the stake hike can be done in one or several tranches.
According to an earlier Sebi circular, the regulator had allowed creeping acquisition up to 5 per cent if a person together with persons acting in concert (PAC) is holding above 55 per cent, but below 75 per cent of the equity share capital in the target company.
Sebi has said that there is no specified time period within which one needs to do 5 per cent stake hike. It can be done as and when wanted and no time period has been fixed. Sebi has also clarified that the stake hike can not be done post 75 per cent. For example, if it is at 73 per cent and it could go technically up to 78 per cent, however, it will be capped at 75 per cent.
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