Takeover Code
SEBI's regulations governing substantial acquisition of shares and takeovers of listed companies.
How it is identified
Test: the acquisition crosses a prescribed threshold of voting rights or amounts to acquiring control, triggering disclosure and open offer obligations
Unit
qualitative
In depth
The code's purpose is transparency and equal treatment: it requires disclosure as stakes are built, and it forces an exit opportunity for public shareholders when control changes. Its key thresholds are 5% for disclosure, 25% for the mandatory open offer, and a maximum permitted non-public holding beyond which delisting rules engage. Creeping acquisition rules allow existing controllers to add up to 5% a year without a fresh offer. The code also defines control broadly enough to include agreements that confer influence without a shareholding threshold being crossed, which is why some deals trigger an offer unexpectedly.
Worked example
An investor moving from 24.2% to 25.6% crosses the trigger and must make an open offer for at least a further 26% of the expanded capital — a far larger commitment than the 1.4% purchase that caused it.
Illustrative figures, chosen so the arithmetic is easy to follow. Not a live price and not a valuation of any company.
Educational reference only
This entry explains what “Takeover Code” means. It is not investment advice and not a recommendation to buy or sell any security. Any numbers above are illustrative, not live prices, and nothing here predicts price direction or rates a stock. Consider your own circumstances and consult a SEBI-registered investment adviser before acting.