Open offer on substantial acquisition or acquisition of control
The mandatory public offer an acquirer has to make on crossing 25% of a target company, or on acquiring control of it.
Open offer on crossing 25% or acquiring control
Counted from an agreement to acquire, or an acquisition that would take the holding to 25% or more, or would give control
- SEBI
- Insider trading and takeovers
- Not specified
- 2026-09-01
The trigger is the acquisition, not a date. SAST Reg 3(1) requires an acquirer who, together with persons acting in concert, would hold 25% or more of the shares or voting rights of a target company to make a public announcement of an open offer first. Reg 4 does the same for the acquisition of control, whatever the shareholding. The timetable that follows, from the public announcement through the detailed public statement to the letter of offer, is set by Chapter III and is not modelled on this page.
Deadlines counted from an event
No acquirer, together with persons acting in concert, may acquire shares or voting rights that entitle them to 25% or more, or acquire control, without making a public announcement of an open offer. Reg 3(1) sets the 25% threshold and Reg 4 the control trigger. The public announcement is made on the date of the agreement or the acquisition, so there is no period to count.
The rule
No acquirer, together with persons acting in concert, may acquire shares or voting rights that entitle them to 25% or more, or acquire control, without making a public announcement of an open offer. Reg 3(1) sets the 25% threshold and Reg 4 the control trigger. The public announcement is made on the date of the agreement or the acquisition, so there is no period to count.
Who must comply
- An acquirer whose holding, with persons acting in concert, would reach 25% or more of a target company
- An acquirer acquiring control of a target company, irrespective of the shareholding acquired
- Reg 10 exempts specified acquisitions from the open offer obligation, subject to its own reporting requirements
- For a company listed on the Innovators Growth Platform, Reg 3(5) reads the 25% threshold as 49%
Statutory basis
Before you file
- Calculate the holding of the acquirer and of every person acting in concert.
- Decide whether the transaction gives control, apart from any shareholding test.
- Check whether the acquisition is exempt under Reg 10.
- Appoint a manager to the open offer.
- Arrange the escrow the regulations require before the detailed public statement.
How to file
- Make the public announcement on the date of the agreement or the acquisition.
- Send the public announcement to every stock exchange where the target's shares are listed.
- Send a copy to SEBI and to the target company.
- Follow the Chapter III timetable for the detailed public statement and the letter of offer.
- Do not complete the acquisition before the open offer requirements are met.
If you miss it
Section 15H of the SEBI Act names this failure directly: not making a public announcement to acquire shares at a minimum price, not making a public offer by sending a letter of offer, and not paying the shareholders who tendered. The penalty is ₹25 crore or three times the profit made from the failure, whichever is higher. SEBI also routinely directs the acquirer to make a delayed open offer with interest to the shareholders who were deprived of the exit.
- SEBI can direct the acquirer to make the open offer late, with interest for the period of the delay
- SEBI can direct divestment of the shares acquired in breach, and can bar the acquirer from the securities market under section 11(4) of the SEBI Act
- The shares acquired in breach can be barred from exercising voting rights
Common questions
What triggers a mandatory open offer?
Crossing 25% of the shares or voting rights of a target company with persons acting in concert, under Reg 3(1), or acquiring control of the target, under Reg 4. The control trigger has no shareholding threshold.
Is the threshold the same on every platform?
No. Reg 3(5) reads the 25% threshold as 49% for a company listed on the Innovators Growth Platform.
Does the page show the open offer timetable?
No. The detailed public statement, the draft letter of offer to SEBI, the escrow and the offer period sit in Chapter III and run off the acquirer's own public announcement. That timetable is transaction-specific and we have not authored a date rule for it.