Authority: Kamlesh Chandra Varshney, Whole Time Member, Securities and Exchange Board of India
Order Date: June 12, 2026
Case Overview
SEBI considered an application dated April 09, 2026 from Mr. Mahabir Prasad Gupta, trustee of MPG Family Trust, seeking exemption from open offer requirements under regulations 3(2) and 4 of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011. The application concerned the proposed direct acquisition of 11,59,673 shares (6.98% stake) in Bharat Rasayan Limited from promoter Mahabir Prasad Gupta, reducing his holding from 9.97% to 2.99%. The Target Company has an issued paid-up capital of INR 8,31,05,360 divided into 1,66,21,072 equity shares of INR 5 each, with promoter shareholding at 74.99% and public shareholding at 25.01% pre-transaction.
MPG Family Trust is an irrevocable, discretionary private trust established on March 13, 2025, with settlors, trustees, and beneficiaries consisting entirely of family members of the promoters. The trust proposed the acquisition as part of an internal family reorganization for succession planning and welfare purposes, asserting that it represented a non-commercial transaction that would not affect public shareholders' interests or change effective control of the company.
SEBI's consideration noted that the transaction qualified for exemption under Chapter 8 of the SEBI Master Circular (SEBI/HO/CFD/PoD-1/P/CIR/2023/31) as it involved: (i) internal reorganization within the promoter family; (ii) no change in overall promoter shareholding (74.99% pre and post); (iii) no alteration to public shareholding (25.01%); (iv) trustees and beneficiaries being immediate family members; and (v) compliance with minimum public shareholding requirements.
Final Outcome
SEBI granted exemption from open offer requirements subject to 12 specific conditions: (1) compliance with Companies Act 2013 and other laws; (2) filing acquisition report within 21 days; (3) accuracy of application statements; (4) compliance with application undertakings; (5) adherence to Master Circular Chapter 8 guidelines; (6) trust deed compatibility with conditions; (7) annual compliance confirmation disclosed in shareholding pattern; (8) annual independent audit certification; (9) treatment of ownership as vesting with both trustees and beneficiaries; (10) continued liability of transferor; (11) disclosure of any trustee/beneficiary changes within 2 days; and (12) completion of acquisition within one year from order date (by June 11, 2027). The exemption is limited to open offer requirements and does not exempt other regulatory obligations including disclosure requirements under SAST Regulations, insider trading rules, or listing regulations.
Topics: SEBI Exemption, Family Trust Acquisition, Open Offer Requirements