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

Order Date: July 03, 2026

Case Overview

An application dated August 07, 2025, was filed by IVG Trust seeking exemption from the obligations to make a public announcement of an open offer under Regulations 3, 4, and 5 of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (SAST Regulations). The application pertained to a proposed direct and indirect acquisition of shares and voting rights in Vadilal Industries Limited (Target Company), a listed entity. The application was updated on November 9, 2025, and after seeking clarifications and receiving an amended Trust Deed on May 08, 2026, it was examined. The proposed transaction involves an internal reorganization within the promoter family of the Target Company through non-commercial gifts of shares to the trust.

The proposed acquisition was structured in two parts:

1. Direct Acquisition in Target Company: Ila V Gandhi and Janmajay Virendrabhai Gandhi would gift their direct shareholdings (1,07,931 shares or 1.50% and 14,893 shares or 0.21%, respectively) to Virendrabhai Ramchandra Gandhi. He would then gift his cumulative direct holding of 2,81,458 shares (3.92%) to IVG Trust.

2. Indirect Acquisition via Promoter Group Companies: Shares held by family members in four promoter group companies—Vadilal International Private Limited (VIPL), Vadilal Finance Company Private Limited (VFCPL), Veronica Constructions Private Limited (VCPL), and Axilrod Private Limited (Axilrod)—would be gifted to Virendrabhai Ramchandra Gandhi, who would then gift them to the trust. This would give the trust indirect control over these companies, which collectively hold 47.20% of the Target Company.

The Acquirer Trust, IVG Trust, is an irrevocable discretionary private trust with settlors, trustees, and beneficiaries全部 being promoters or immediate family members of the promoter group. The trustees are Virendrabhai Ramchandra Gandhi and Janmajay Virendrabhai Gandhi. The beneficiaries are Virendrabhai Ramchandra Gandhi, Ila V Gandhi, Janmajay Virendrabhai Gandhi, and his lineal descendants.

The grounds for seeking exemption were that the transaction was an internal family reorganization for succession planning, would not change aggregate promoter shareholding (64.72% pre and post-acquisition) or control, would not affect public shareholding (35.28%), and complied with the conditions stipulated in Chapter 8 of SEBI Circular No. SEBI/HO/CFD/PoD-1/P/CIR/2023/31 dated February 16, 2023.

Final Outcome

SEBI granted the exemption to IVG Trust from the obligation to make an open offer under Regulations 3, 4, and 5 of the SAST Regulations, 2011. The exemption is subject to several conditions:

(a) The acquisition must be done per the Companies Act, 2013, and other laws.

(b) A report on the completion of the acquisition must be filed with SEBI within 21 days.

(c) All statements and facts in the application must be true and correct.

(d) The trust must comply with all undertakings and disclosures made in the application and the conditions of the SEBI Circular.

(e) The Trust Deed must not contain covenants contrary to these conditions and must be modified if necessary.

The exemption is limited to the open offer obligation and does not exempt the parties from other disclosure requirements under the SAST Regulations, Prohibition of Insider Trading regulations, or LODR Regulations. The exemption is valid for one year from the order date, and the acquisition must be completed within this period.

Topics: SEBI Exemption, Internal Restructuring