SAST Regulations

Rethinking Open-Offer Financing: The Impact Of RBI’s Acquisition Financing Liberalisation

Summary: Indian banks are now permitted to finance acquisitions of ‘control’ over target companies, marking the most significant liberalisation of acquisition financing in India in decades. However, where the target is a listed company, the mandatory open offer obligations under the SAST Regulations introduce a series of interpretive questions regarding the interplay between the CF Directions 2026 and the open offer financing obligations.

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SEBI

Background

SEBI has been progressively tightening the regulatory regime surrounding transactions impacting listed entities – beginning with the implementation of the Kotak Committee recommendations on related party transactions (RPTs) through amendments to the LODR Regulations on May 9, 2018. Shortly thereafter, in November, 2019, SEBI constituted a Working Group (WG) to re-examine the RPT provisions of LODR Regulations, which resulted in the markets regulator notifying amendments on November 9, 2021, which took effect from April 01, 2022. These amendments brought about a paradigm shift by making the RPT approval and disclosure requirements applicable to listed companies in India very expansive and stringent.

Continue Reading Proposed Amendments to LODR on Agreements Affecting Listed Companies – Swatting Flies with a Sledgehammer?