SAT rejects late competing bid for Religare, holds 15-day deadline runs from first acquirer’s detailed public statement, not its Letter of Offer

Religare Enterprises Limited (“REL”), a listed company and RBI-registered NBFC, had no identifiable promoter.

M.B. Finmart Pvt. Ltd., Puran Associates Pvt. Ltd., VIC Enterprises Pvt. Ltd. and Milky Investment and Trading Company (“Burman Group”), collectively holding 21.54% of REL, proposed to acquire additional shares that would take their holding beyond 25%, thereby triggering the open-offer obligations under Regulations 3(1) and 4 of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (“SAST Regulations”).

The Burman Group issued its public announcement on 25 September 2023 and its Detailed Public Statement (“DPS”) on 4 October 2023.

The appellant later sought to make a competing offer for 55% of REL’s outstanding equity at ₹275 per share, compared with the Burman Group’s offer price of ₹235 per share.

By then, the Burman Group had received SEBI’s comments, issued the Letter of Offer on 18 January 2025, and commenced the tendering process.

The Supreme Court directed the appellant to deposit ₹600 crore by 12 February 2025, later permitting the deposit by 13 February 2025, as a condition for continuation of the Burman Group’s offer pending SEBI’s decision.

The appellant did not deposit the amount and did not appear for the SEBI hearing fixed on 14 February 2025.

SEBI rejected his exemption application, leading to the present appeal under Section 15T of the SEBI Act, 1992.

Whether the appellant could make a competing open offer by reckoning the 15-working-day period under Regulation 20(1) from the date of dispatch or advertisement of the Letter of Offer, rather than from the date of the DPS.

Whether Regulation 11 empowered SEBI to exempt the appellant from the timelines and procedural requirements applicable to a competing offer under Regulations 20(1) and 20(5).

Whether the appellant’s failure to deposit ₹600 crore in compliance with the Supreme Court’s orders rendered the continuation of the takeover proceedings untenable or infructuous.

The Tribunal applied Regulations 3(1), 4, 13(1), 13(4), 16, 17, 18 and 20 of the SAST Regulations.

Regulation 3(1) prohibits acquisition beyond 25% without making an open offer.

Regulation 20(1) entitles a competing acquirer to make a public announcement only within 15 working days from the date of the DPS issued by the acquirer who made the first public announcement.

Under Regulation 20(8), the competing offeror must follow the same schedule and procedural requirements applicable to the first acquirer.

Regulation 11(1) permits SEBI, for recorded reasons and subject to conditions, to exempt an acquirer from the obligation to make an open offer; it does not constitute a general power to relax statutory timelines or procedural requirements governing an ongoing offer.

The Tribunal also applied the principle that clear statutory language cannot be rewritten through purposive interpretation, particularly where the proposed interpretation would prejudice the first offeror, create uncertainty and undermine equal treatment among bidders.

The Tribunal held that Regulation 20(1) was unambiguous: the relevant trigger was the DPS dated 4 October 2023, not the later Letter of Offer dated 18 January 2025 or its advertisement dated 23 January 2025.

The appellant had therefore been required to make his competing public announcement within 15 working days of the DPS but admittedly made no such announcement.

Treating the Letter of Offer or its advertisement as the DPS would impermissibly alter the statutory scheme and discriminate against the Burman Group, which had already deposited funds in escrow, obtained regulatory approvals and complied with the prescribed process.

Such an interpretation would also create uncertainty concerning the duration of takeover proceedings and the consequences if a proposed competing acquirer failed to obtain RBI or other regulatory approvals.

The Tribunal further found that Regulation 11 could not be invoked to excuse non-compliance with the competing-offer timelines, since it concerned exemption from the obligation to make an open offer and not relaxation of procedural requirements in an ongoing offer.

The appellant had also failed to comply with the Supreme Court’s conditional direction to deposit ₹600 crore; under the order dated 7 February 2025, non-deposit automatically vacated the continuation directions.

Consequently, the Burman Group’s offer ended on 13 February 2025, rendering subsequent proceedings concerning the appellant’s proposed competing offer infructuous.

It held that the 15-working-day period under Regulation 20(1) commenced from the DPS dated 4 October 2023, that Regulation 11 did not authorise exemption from the applicable competing-offer timelines, and that the appellant’s non-compliance with the Supreme Court’s deposit direction further defeated his claim.

The appeal was dismissed, the pending interlocutory applications were disposed of, and no order as to costs was made.

The Tribunal clarified that the appellant remained free to initiate a fresh takeover offer in accordance with the SAST Regulations.