Capital markets regulator Sebi on Thursday exempted three family trusts linked to promoters of Shakti Pumps (India) Ltd from making an open offer to the company’s shareholders following their proposed direct acquisition of shares. The order came after the trusts filed applications with the regulator in May 2023, and sought exemption from certain provisions of takeover regulations.
These trusts had been set up as private family trusts to streamline succession planning.
Under the proposed transaction, respective settlors of Shakti Sons Trust, Shakti Brothers Trust and Shakti Future Trust — Dinesh Patidar, Sunil Patidar and Ankit Patidar — plan to transfer the shares held by them in Shakti Pumps by way of gift to the respective acquirer trusts.
After the proposed acquisition, Shakti Sons Trust, Shakti Brothers Trust and Shakti Future Trust would hold 20.50 percent, 8.50 percent and 8.16 per cent stakes respectively, in the target company as currently being held by the transferors, who are part of the promoter and promoter group of the target company.
Granting an exemption from the open offer, Sebi noted that the proposed acquisition is intended to streamline succession and promote welfare of the promoters’ family. The proposed direct acquisition would be by way of gift, which would not affect the interests of the public shareholders of the target company in any manner.
Also, it noted that the proposed transactions would not lead to any change in the control of the target firm and the pre-acquisition and post-acquisition shareholding of the promoters in the target firm will remain the same.
Accordingly, Sebi has granted “exemption to the proposed acquirers, viz. Shakti Sons Trust, Shakti Brothers Trust and Shakti Future Trust from complying with the requirements of…. the Takeover Regulations 2011 with respect to the proposed direct acquisition in the Target company, i.e. Shakti Pumps (India) Ltd”.
Further, Sebi said the exemption granted is limited to the requirements of making an open offer under the Takeover Regulations, 2011, and will not be construed as an exemption from the disclosure requirements.