What Is a Conditional Open Offer? SEBI Regulation 19

A conditional open offer is an open offer an acquirer makes subject to a minimum level of acceptance: if not enough shareholders tender, the acquirer buys nothing. Regulation 19(1) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, read in the consolidation last amended on 5 December 2025 (read on 19 September 2026), permits it in one line, then attaches a proviso that does the real work. Where the open offer follows an agreement, that agreement must itself contain a condition that if the desired level of acceptance is not received, the acquirer shall not acquire any shares under the open offer and the agreement attracting the offer obligation stands rescinded. The conditional open offer is therefore all-or-nothing on both legs, the offer and the underlying deal.

What is a conditional open offer, and what does the acquirer give up?

Three restrictions travel with the structure, and together they explain why it is used sparingly.

• No buying on the side. Regulation 19(2) bars the acquirer and its persons acting in concert from acquiring any shares in the target during the offer period, except under the open offer and the underlying sale agreement the offer was made pursuant to. An unconditional bidder has more room here.
• No board seat. Regulation 24(2) says that where an open offer is conditional upon a minimum level of acceptances, no director representing the acquirer or its persons acting in concert may be appointed to the target's board during the offer period, and it says so "regardless of the size of the cash deposited in the escrow account". For an unconditional offer, depositing the entire consideration in the escrow account buys that right after fifteen working days from the detailed public statement under the first proviso to Regulation 24(1).
• A live rescission risk on the deal itself. The proviso to Regulation 19(1) requires the underlying agreement to fall away with the offer.

How does a conditional offer change a takeover contest?

It sets the rules for everyone else. Regulation 20(6) provides that unless the open offer first made is conditional as to the minimum level of acceptances, no competing offer may be conditional. So a first bidder who goes conditional opens that structure to its rivals, and a first bidder who does not closes it.

The withdrawal rules are separate and do not soften. An offer that fails its acceptance condition is not a withdrawn offer: withdrawal has its own exhaustive list of grounds in Regulation 23(1), covered in when an open offer can be withdrawn.

Why does a conditional open offer exist at all?

Because a mandatory open offer is for at least 26 percent of the target under Regulation 7(1), and an acquirer that only wants control on a particular shareholding may not want to be forced to buy a large block regardless of how the tendering goes. The condition converts the open offer from a guaranteed purchase into a threshold test. What it costs, as the list above shows, is flexibility during the offer period and a board seat. For the offer obligation itself and its triggers, see what a SAST open offer is.

Where does a conditional open offer show up in the filings?

The condition and the minimum acceptance level are stated in the public announcement, the detailed public statement and the letter of offer, all filed with the exchanges. Whether the acquirer actually ended up with shares is answered by its Regulation 29 SAST disclosures and by the target's next quarterly shareholding pattern, which is the check worth running: an announced conditional open offer that failed its threshold leaves the promoter and public columns unchanged.

Flock reads these filings from the exchange record and dates every figure to the filing it came from. What a conditional open offer means for a company you follow is your call to make. This is not investment advice.