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

Order Date: October 14, 2026

Case Overview

This order concerns an application filed by Shashi Kiran Shetty Family Trust (the Acquirer Trust) seeking exemption from the mandatory open offer requirements under regulations 3(1) and 4 of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (SAST Regulations). The application, dated March 19, 2026, with subsequent addenda dated September 7 and September 30, 2026, was for a proposed direct acquisition of shares in Allcargo Logistics Limited (Target Company).

The proposed transaction involves the transfer of 51,54,24,268 equity shares, representing 34.41% of the total paid-up capital of Allcargo Logistics, from Mr. Shashi Kiran Janardhan Shetty (a promoter) to the Shashi Kiran Shetty Family Trust. The Trust is an irrevocable, discretionary private trust settled by Mr. Shetty for bona fide succession planning and estate consolidation. Its trustees and beneficiaries consist exclusively of existing promoters, their immediate family members (wife Arathi Shetty, son Vaishnavkiran Shetty, daughter Shloka Shetty, daughter-in-law Sonali Sundeep Tolani, brother-in-law Adarsh Sudhakar Hegde), and their lineal descendants.

SEBI's consideration focused on whether this inter-se transfer within the promoter group triggered the need for a public open offer. The key grounds for exemption were that the transaction was non-commercial, involved no cash consideration, and would result in no change in the ultimate beneficial ownership, economic interest, voting control, or the aggregate promoter and promoter group shareholding (remaining at 40.28%). The public shareholding would also remain unchanged at 59.72%. The Applicant Trust argued there was no prejudice to public shareholders and that it complied with the framework and conditions stipulated in SEBI's Master Circular dated February 16, 2023.

SEBI noted the Trust Deed incorporated specific safeguards required by the Master Circular, including clauses ensuring the trust is a mirror image of promoter holdings, restrictions on transferring beneficial interest or trustee powers, and obligations for annual compliance certification and disclosure.

Final Outcome

SEBI granted the exemption to the Shashi Kiran Shetty Family Trust from the obligations to make a public open offer under regulations 3(1) and 4 of the SAST Regulations, 2011. The exemption is subject to several conditions: (a) The acquisition must comply with the Companies Act, 2013 and other laws; (b) A report on the acquisition must be filed with SEBI within 21 days of completion; (c) All statements and facts in the application must be true and correct; (d) The Trust must comply with all disclosures, undertakings, and provisions of Chapter 8 of the Master Circular; (e) The Trust Deed must not contain covenants contrary to these conditions and must be modified if necessary. The exemption is valid for one year from the order date (until October 13, 2027), and the transaction must be completed within this period. The exemption is limited to the open offer requirements and does not exempt the parties from other disclosure obligations under the SAST Regulations, Prohibition of Insider Trading Regulations, or LODR Regulations.

Topics: SEBI Exemption, Takeover Regulations, Promoter Share Transfer