Share sales via exchange: Decoding the mechanism

By Yogesh Chande, Shardul Amarchand Mangaldas & Co
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Through a notification dated 24 March 2015, the Securities and Exchange Board of India (SEBI) amended its Buy Back of Securities Regulations, 1998, Substantial Acquisition of Shares and Takeovers Regulations, 2011, and Delisting of Equity Shares Regulations, 2009, to facilitate tendering and settlement of shares through the stock exchange’s acquisition window mechanism. The purchase and settlement of shares for tender offers, which had always been “off-market”, was made available for settlement through the stock exchange mechanism in the form of a separate window.

Yogesh Chande
Yogesh Chande

Outlined below are the operational aspects of the acquisition window as regards order placement and settlement of funds and securities. Settlement of trades is carried out in a manner similar to the secondary market.

During the tendering period, eligible sellers place their order for selling the shares through their stockbroker (trading member) during normal trading hours of the secondary market. The cumulative quantity tendered is displayed on the stock exchange website throughout the trading session at specific intervals during the tendering period.

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Yogesh Chande is a partner at Shardul Amarchand Mangaldas & Co.

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