This regulation is intended to allow acquisitions (both direct & indirect) for those individuals

who have in the present scenario hold more than 25% shares or voting rights yet under 75%
offers or voting rights in the Target Company. Regulation 3(2) permits the people either without
anyone else’s input or through Person acting concrete (PAC) with them who are holding over
25% however under 75% shares or voting rights in the Target Company to acquire further upto
5% shares or voting rights. This was permitted under Regulation 3 (2) and was popularly as
“Creeping acquisition.” This is beneficial for both investors and promoters and others also as of
now, they can increase their holding without mandatorily purchasing it from stock market.

In any case, it is to be noticed that the creeping acquisition limit is restricted to the condition that
the post-acquisition shareholding of the acquirer does not surpass the maximum limit permissible
non-public shareholding.