SEBI Rejects TeleCanor Global Promoter’s Plea for Exemption from Open Offer Norms

Moneylife Digital Team 06 October 2025

Investor Interest

Market regulator Securities and Exchange Board of India (SEBI) has rejected an application filed by Vijay Lakshmi Praturi, promoter of TeleCanor Global Ltd, seeking exemption from making a mandatory open offer under the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011.

TeleCanor Global, whose shares are listed on BSE, had proposed to allot 30 lakh equity shares and 40 lakh convertible share warrants to the promoter on a preferential basis. This would have raised the promoter’s stake in the company from the existing 13.31% to 31.38%, and further to 42.39% upon conversion of warrants. Such an increase would normally trigger the open offer obligation under Regulations 3 and 4 of the Takeover Code.

The promoter sought exemption on the grounds that the company is under financial distress and needs urgent infusion of funds to comply with a one-time settlement (OTS) agreement with Phoenix Asset Reconstruction Company Pvt Ltd (PARCPL) for repayment of Rs2.25 crore. The acquirer argued that bearing additional costs of around Rs2 crore for an open offer would be counterproductive, given the company’s weak financial state.

SEBI, however, observed that the exemption could not be granted as it would deprive minority shareholders of their statutory right to exit. The regulator stressed that while companies are free to choose modes of fundraising, options such as rights issues would allow all shareholders an equitable opportunity to participate, unlike a preferential allotment that benefits selected investors.

The market regulator also noted that several earlier exemption cases cited by the acquirer, including those involving SpiceJet, Patel Engineering and SPEL Semiconductor, were not comparable to the present matter, as they involved circumstances like debt restructuring, court-approved schemes or corporate insolvency resolution.

Citing Supreme Court judgements, SEBI reiterated that the core purpose of the Takeover Regulations is to safeguard the interests of minority shareholders by ensuring an exit opportunity whenever control thresholds are breached. It also pointed out that Regulation 10(2B) of the Takeover Code provides specific relief for financially distressed companies, but explicitly excludes promoters from availing such exemptions.

Accordingly, SEBI’s whole-time member (WTM) Kamlesh Chandra Varshney dismissed the application, ruling that Vijay Lakshmi Praturi must comply with the mandatory open offer requirements if she proceeds with the proposed acquisition.

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