Government gets open offer exemption in Allahabad Bank

The Securities and Exchange Board of India (Sebi) has exempted the government from the open offer obligation in Allahabad Bank. As part of the project 'Indradhanush Plan', the government had infused around Rs 690 crore in the public sector lender, which increased its shareholding by 5.83 per cent.

An increase of 5 per cent in shareholding of a promoter in a single financial year triggers an open offer to buy additional 26 per cent. The government requested Sebi for an exemption as the capital infusion in Allahabad Bank triggered the open offer obligation.

Just like on previous occasions, Sebi granted the government with the request as the move to infuse capital is in the interest of minority shareholders.

"The capital adequacy of the bank is a requirement to protect its small customers as well as the public shareholders who have invested in its equity. Further, there would be no change in the management control in the target company," said Prashant Saran, whole time member, Sebi in an order granting exemption to the government.