Notification no. F. No. SEBI/LAD-NRO/GN/2025/283; Dated: 03.12.2025
1. Regulatory Background
The Securities and Exchange Board of India (SEBI) has notified the SEBI (Substantial Acquisition of Shares and Takeovers) (Amendment) Regulations, 2025, updating the valuation and compliance framework applicable to takeover transactions, including open offers. The amendments enhance transparency in pricing, improve investor confidence, and ensure independent valuation where acquisition consideration or traded volume creates pricing ambiguity.
2. Independent Valuation of Infrequently Traded Shares
Under the amended norms, SEBI may require a valuation of infrequently traded shares if:
- The shares being acquired or transferred do not meet liquidity benchmarks, and
- Market prices may not accurately reflect fair value due to limited or sporadic trading activity
Key Provision
- SEBI may direct valuation at the expense of the acquirer
- The valuation must be carried out by an independent registered valuer
This mechanism protects minority shareholders and ensures that offer prices are fair, transparent, and not distorted by low trading volumes.
3. Valuation of Listed Securities Offered as Consideration
Where the acquirer offers listed securities instead of cash as consideration for the acquisition or open offer:
- The value of such securities must be certified by an independent registered valuer
- Certification ensures that the market price reflects genuine fair value, free from anomalies caused by manipulation, temporary volatility, or low float
This provision ensures equitable pricing regardless of the form of consideration.
4. Definition of Valuer Introduced Under Regulation 2
To standardise qualification, accountability, and independence criteria, SEBI has inserted a definition of “valuer” under Regulation 2.
Regulatory Significance
- Confirms that valuations required under the Takeover Regulations must be undertaken by an independent registered valuer
- Reinforces credibility, transparency, and governance standards in pricing methodologies used in takeover transactions
5. Regulatory Intent
The amendments strengthen:
- Price discovery and fairness for minority shareholders
- Disclosure discipline and valuation integrity
- Investor protection in complex or non-cash acquisition structures
- Governance expectations for acquirers structuring open offers, mergers, strategic stake purchases, or indirect acquisitions
They also align the Takeover Regulations with evolving corporate valuation norms and the registered valuer framework under Indian law.
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