Authority: Kamlesh Chandra Varshney, Whole Time Member, Securities and Exchange Board of India

Order Date: October 12, 2026

Case Overview

The order concerns an application filed by Mrs. Neerja Jhunjhnuwala, as trustee of DKJ Ownership Trust, seeking exemption from mandatory open offer requirements under regulations 3(1) and 4 of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011. The application dated June 17, 2026 proposed direct acquisition of 7,000,000 equity shares (19.85% voting rights) in S Chand and Company Limited from promoter Mrs. Neerja Jhunjhnuwala to DKJ Ownership Trust, an irrevocable discretionary private trust established on April 08, 2025.

The Target Company, S Chand and Company Limited, has an issued and paid-up share capital of ₹17,63,60,960 divided into 3,52,72,192 equity shares of ₹5 each. Pre-transaction promoter shareholding stood at 46.99% (1,65,73,927 shares), with public shareholding at 53.01% (1,86,98,265 shares). Post-transaction, DKJ Ownership Trust would hold 19.85% directly, while Mrs. Neerja Jhunjhnuwala's holding would reduce from 22.68% to 2.84%, keeping total promoter shareholding unchanged at 46.99%.

The grounds for exemption cited that the transaction was a non-commercial family arrangement for succession planning and avoiding future family conflicts. The trust's settlors, trustees, and beneficiaries are all promoters/immediate relatives (Neerja Jhunjhnuwala, Dinesh Kumar Jhunjhnuwala, Gaurav Kumar Jhunjhnuwala, Nandita Sureka, and their lineal descendants), ensuring no change in ultimate control or beneficial ownership. The applicant argued compliance with all 14 conditions specified in Chapter 8 of SEBI Master Circular SEBI/HO/CFD/PoD-1/P/CIR/2023/31 dated February 16, 2023.

SEBI's consideration noted that the acquisition would attract regulations 3(1) and 4 of SAST Regulations as it involves substantial acquisition of shares and voting rights. However, it found the transaction to be an internal reorganization within the promoter family with no prejudice to public shareholders, no change in control, and maintenance of minimum public shareholding requirements.

Final Outcome

SEBI granted exemption to DKJ Ownership Trust from making an open offer under regulations 3(1) and 4 of SAST Regulations, 2011, subject to 11 specific conditions: (1) compliance with Companies Act 2013 and other laws; (2) filing acquisition report with SEBI within 21 days of completion; (3) accuracy of application statements; (4) compliance with undertakings and Master Circular provisions; (5) ensuring trust deed covenants align with conditions; (6) disclosure requirements under Chapter V of SAST Regulations remain applicable; (7) compliance with PIT and LODR regulations; (8) exemption valid for one year from order date; (9) transaction must be completed within this period; (10) annual compliance confirmation disclosed in shareholding pattern; (11) annual independent audit certification furnished to stock exchanges and SEBI. The exemption is limited to open offer requirements and doesn't exempt other regulatory obligations.

Topics: SEBI Exemption, Promoter Share Transfer, Family Trust