SYMBIOSIS INTERNATIONAL DEEMED UNIVERSITY

COMPANY LAW II
SYNOPSIS

‘AN OVERVIEW OF TAKEOVER CODE IN INDIA’

---------------------------------------------------
Submitted by
Mrtyunjay Kandpal
Division- ‘D’
PRN – 18010324084
Year – 3rd year
---------------------------------------------------
In
February, 2021
Under the guidance of
Ms. Anita Sable
INTRODUCTION
Takeover refers to the process of acquiring a company that has already been registered under
the Companies Act. It involves purchasing of shares of the company from their shareholders
at a particular price. The intention behind the acquisition made or shares purchased is to at
least exercise control over the interests of the company. There are various ways in which a
company can be taken over and the control over their business can be acquired. One of the
ways in which one company can take over the other is by buying majority of the shares of the
targeted firm. Acquisition over the shares of the company also leads to acquiring the control
over the management of the target firm. The company that purchases the other is known as
the ‘acquirer’ whereas the other one that is purchased is generally called as the ‘target
firm/company’.
In India, the process of takeover is regulated by a code which is known as the Takeover
Regulations. It is also referred to as “Substantial Acquisition of shares and Takeovers
Regulations 2011”1. These regulations have been framed and designed by the Securities and
Exchange Board of India (SEBI). They run these regulations and ensure that all the listed
companies carry out the process of takeover as per the regulations that are set out by them.
The regulations that govern takeover code in India were first notified in the year 1994 post
which a committee called the ‘Bhagwati Committee’ was constituted to frame the regulations
required for the protection of shareholders and for the promotion of orderly and healthy
growth of the securities market. In the year 2001, the mentioned committee was constituted
again for the purpose of revising the already existing regulations. Post this, between the year
2009-2011 an advisory board was formed to recommend changes in the regulations
governing the process of takeover. Finally, new regulations recommended by the board were
taken into consideration by SEBI and the takeover regulations 2011 were brought into force.
The regulations of takeover in India principally includes 3 kinds of tender offers, namely
Mandatory Tender Offers, Voluntary offers & competing offers. All these types of offers
govern the initial process involved in taking over a company.
Several changes have been introduced in the new set of regulations in relation to the open
offer, creeping acquisition, offer made voluntarily to the shareholders, indirect acquisition of
the target firm, the size required to make an open offer, etc. all these changes have been
introduced to secure the interests of the investors and avoid unhealthy and fraudulent

1
Takeover Code, Referencer on SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011,
M&A- Tax & Regulatory Services, www.pwc.com/india
practices in the securities market. The takeover code of India mandates all the transactions to
occur in a manner as specified and laid down in the regulations. However, there are certain
transactions that are exempted from these regulations such as the buyback shares and the
transfer of shares that take place inter se.
There are various landmark examples of takeovers in India. These include the case of Daiichi
Sankyo Company Ltd case2, the Premier ltd case3, IAG Comp Ltd case4, etc. all these cases
discuss how takeovers have been taken place in India and how it is highly important for the
companies to follow the regulations as governed by SEBI.
All the aspects in relation to the given topic will be discussed in detail in the research paper.

SCOPE AND EXTENT OF THE STUDY

The present study aims to discuss the concept, evolution, purpose, as well as kinds of
takeovers in India. Additionally, the scope of the paper extends towards discussing in detail
and analyzing the implications and provisions of the new takeover regulations that have been
introduced by SEBI. The paper will also cover the various kinds of tender offers as provided
under the takeover code & all the financial transactions that are exempted from the code.
Lastly, the study will analyze various landmark cases and judicial pronouncements that have
explained the concept and importance of takeover regulations in India.

RESEARCH OBJECTIVES
The objectives of the research paper are as follows: -
 The primary objective of the paper is to study in detail the concept, evolution, necessity
of takeover code in India.
 The paper also aims to analyze the various types of takeover in India.
 To understand the various types of tender offers as prescribed and dealt under the
takeover regulations.
 To study and discuss the various landmark cases and judicial pronouncements in relation
to the takeover regulations.
 To analyze in detail the implications and provisions of the amended regulations as
provided in the ‘takeover regulations 2011’.

2
Daiichi Sankyo Company Ltd. v. Jayaram Chigurupati and Ors, 2010(6)UJ3002(SC)
3
Order of SEBI, WTM/KMA/CFD/307/10/2010.
4
Order of SEBI, WTM/KMA/CFD/212/01/2011
RESEARCH QUESTIONS
The present paper aims to address the following research questions: -
1. What is the concept of takeover, how has it evolved in India and why is it needed?
2. What are the various kinds of takeovers in India?
3. What are the types of tender offers that are prescribed under the takeover regulations?
4. What are the various provisions, implications and changes that have been brought in the
new takeover regulations of 2011?
5. What are the few landmark cases and judicial pronouncements of India that have been
decided in relation to takeover regulations?

RESEARCH METHODOLOGY
The research methodology that will be undertaken for this project is the doctrinal form of
research. This study will include analysing the given case law, and will also discuss legal
statutes, provisions and sources. No primary source of collection of data will be taken up in
the present paper the researcher will focus the research on secondary sources of data. The
sources which have already been presented and published by various authors will be used in
the paper. The style of citation that the researcher will use throughout the project will be
‘Blue Book Law Review’. Other secondary sources of data such as journals, articles,
newspapers, magazines, etc will be referred. Additionally, opinions of the experts, research
papers, authorised websites, barracked, dictionary as well as book reviews will be looked
upon to carry out research to complete the paper.

LITERATURE REVIEW
Various research papers, articles, journals and books have been referred by the researcher to
carry out research for the research paper in relation to the assigned topic.
The author has referred to a research paper namely, ‘Indian takeover code in search of
excellence’5 which discusses in detail the concept of takeover in India. The paper also
includes the need of takeover code and how the its need has been changed and varied from
time to time & in different periods.
The researcher has referred to another research paper named ‘The takeover code: A
comprehensive overview’6 which presents in detail the evolution of takeover regulations in
India. The purpose, necessity and the scope of the code has also been discussed in the paper.
5
Mahesh Kumar Tambi, Indian Takeover Code in search of excellence (A case study approach),
http://docshare01.docshare.tips/files/3791/37918797.pdf
The paper also provides and analyzes all the landmark cases and judicial pronouncements
that have played an important role in understanding the concept of takeover code in India.
The book ‘Mergers acquisitions & corporate restructuring (strategies and practices)’7,
published by Taxmann discusses the need, and types of takeover in India. Additionally, the
book also analyzes in detail all the implications and provisions that have been brought in the
SEBI Takeover Code 2011. The exemptions which are particularly related to the requirement
of open offer have also been discussed in the book.
Another research paper namely ‘India Takeover guide’8 has also been referred by the
researcher. The paper discusses in detail the background and history of takeover code in
India. The paper also presents the various kinds of tender offers that are dealt and specified
under the takeover regulations. Additionally, all the paper presents all the transactions that
are exempted from the takeover regulations in India.

6
Prof. Dr. Tabrez Ahmad & Satya Ranjan Swain, The Takeover Code: A Comprehensive Overview, USA Vol
2, Number 1: Spring ,2012 PP. 27-42,
7
Rabi Narayan Kar, Mergers acquisitions & corporate restructuring (strategies and practices), Taxmann, 3 rd
Ed.September 2017
8
Cyrill Shroff, India TakeoverGuide, https://www.ibanet.org/Document/Default.aspx?
DocumentUid=3CE2A8B1-98AA-4B2B-9830-FAD5E3A6D16F