SEBI clarifies that shares held in physical form can be tendered in open offers, buy-backs through tender offer route and exit offers in case of delisting

On July 31, 2020, the Securities and Exchange Board of India (“SEBI”) issued a circular titled “Clarification on applicability of regulation 40(1) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 to open offers, buybacks and delisting of securities of listed entities” (“Circular”). The proviso to regulation 40(1) of the of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 states that in order for requests for effecting transfer of securities to be processed, such securities are required to be held in dematerialized form with a depository (except in case of transmission or transposition of securities). SEBI, through the Circular, has clarified that shareholders holding securities in physical form are allowed to tender shares in open offers, buy-backs through tender offer route and exit offers in case of voluntary or compulsory delisting. However, the Circular also stated that such tendering shall be required to be as per the provisions of respective regulations. Please find a copy of the Circular here. This update has been contributed by Adity Chaudhury (Partner) and Deeya Ray (Associate).