The move will give a boost to promoters wanting to increase their stake and enhance investor confidence as the promoter buying more shares is a good signal to shareholders.
The amendment in the regulations allows a promoter owning 25 per cent or more voting rights in a company to increase shareholding by up to 10 per cent in a year versus the earlier limit of 5 per cent. This is valid only for the current financial year and is allowed for a preferential issue of equity shares.
"Sebi relaxation on the creeping acquisition is a double whammy for promoters. They will not only be able to increase their stake but this will also build investor confidence." said Rajesh Thakkar, Partner & Leader/ Transaction Tax, Tax & Regulatory Services, BDO India.
As per a notification, the amendments have been made to the Sebi (Substantial Acquisition of Shares and Takeovers) Regulations, 2011.