Sebi, short for Securities and Exchange Board of India, has rejected the application of Digvijay Gaekwad, a non-promoter investor, for competing in the open offer of Religare Enterprises Ltd.
For the uninitiated, Religare Enterprises Ltd is an India-based private sector financial services company. In 2020, the company’s majority shareholder, Malvinder Sharma (formerly its MD), and other promoters, made an open offer to acquire another 26% stake in the company.
Digvijay Gaekwad, a non-promoter investor, had expressed a desire to participate in this open offer. However, Sebi has now rejected his application citing various reasons.
According to a report from the exchanges, Sebi has rejected the application on the grounds that Gaekwada’s intent in participating in the open offer was not genuine.
In addition, Sebi found that Gaekwad has a significant shareholding in the company and if allowed to participate in the open offer, it could lead to his holding a substantial stake, which could pose a regulatory concern.
Gaekwad was reportedly looking to purchase 2.5 million shares, which would have allowed him to become a significant shareholder in the company. However, Sebi deemed this plan to be detrimental to the interests of the company and it’s existing shareholders.
Sebi’s decision comes as a blow to Gaekwad, who had been optimistic about being able to acquire a significant stake in Religare. However, this move is seen as a key step in maintaining the regulatory framework that prevents concentration of shareholding in listed companies, preserving the integrity of the Indian capital market, and ensuring that companies remain transparent and accountable.