ONLY ONE-TIME STAKE INCREASE OF 5% ALLOWED FOR PROMOTERS

SEBI has clarified that promoters and persons acting in concert (who can hike their stake in a company to 75 per cent through the creeping acquisition route) are only allowed a one-time stake hike of 5 per cent. The stake increase permitted is not an annual or quarterly 5 per cent. However, the one time stake increase of 5 per cent may be done in one or more tranches. Last October SEBI had increased the stake limit for open offer requirement to 75 percent from 55 percent earlier. At that time there was a misconception in some quarters that the promoters could hike their stake in their companies by 5% percent periodically, allowing them to go up to 75 percent.