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

Order Date: July 03, 2026

Case Overview

SEBI considered an application dated August 07, 2025 (updated November 9, 2025) from IVG Trust seeking exemption from making an open offer under regulations 3, 4 and 5 of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011. The application concerned the proposed acquisition of shares and voting rights in Vadilal Enterprises Limited, a BSE-listed company with an issued, subscribed and paid-up equity share capital of INR 86,26,680 divided into 8,62,668 equity shares of face value INR 10 each. The proposed transaction involved an internal reorganization within the promoter family of Vadilal Enterprises Limited. The Acquirer Trust, IVG Trust, is an irrevocable discretionary private trust established under the Indian Trusts Act, 1882, with settlors, trustees, and beneficiaries being existing promoters/promoter group members of the Target Company, including Virendrabhai Ramchandra Gandhi, Ila V Gandhi, and Janmajay Virendrabhai Gandhi.

The proposed acquisition had two components:

1. Direct Acquisition (10.64%): Ila V Gandhi (1.04%) and Janmajay Virendrabhai Gandhi (1.23%) would first transfer their shares to Virendrabhai Ramchandra Gandhi, increasing his holding from 8.48% to 10.64%. He would then transfer this entire 10.64% (91,777 shares) to IVG Trust for no consideration.

2. Indirect Acquisition (5.02%): IVG Trust proposed to acquire 88% shareholding and control in Axilrod Private Limited, an entity categorized as part of the promoter group that holds 5.02% in the Target Company. This would also be achieved by certain shareholders first transferring their stakes in Axilrod to Virendrabhai Ramchandra Gandhi, who would then transfer his increased 88% holding in Axilrod to the Trust.

Post-acquisition, the aggregate shareholding of the promoters and promoter group would remain unchanged at 51.06%, and public shareholding would remain at 48.94%. IVG Trust would be considered a Person Acting in Concert (PAC) with the existing promoters. The primary grounds for seeking exemption were that the transaction was a non-commercial, internal family reorganization for succession planning, with no change in ultimate control or management of the Target Company and no prejudice to public shareholders.

Final Outcome

SEBI granted IVG Trust exemption from the obligation to make a public open offer for the proposed direct and indirect acquisitions in Vadilal Enterprises Limited. The exemption is subject to several conditions:

(1) The acquisition must be completed within one year from the date of the order (by July 02, 2027), failing which the exemption will lapse.

(2) The Acquirer Trust must file a report with SEBI within 21 days of completing the acquisition.

(3) The Trust must ensure compliance with all statements and undertakings made in its application and adhere to the guidelines specified in Chapter 8 of SEBI Circular No. SEBI/HO/CFD/PoD-1/P/CIR/2023/31 dated February 16, 2023.

(4) This includes obtaining an annual compliance certification from an independent auditor and ensuring the Trust Deed is not contrary to SEBI regulations.

The exemption is limited to the open offer requirement and does not provide exemption from other disclosure requirements under the SAST Regulations, the Prohibition of Insider Trading Regulations, or the LODR Regulations.

Topics: SEBI Exemption, Family Trust Acquisition