What Is Omnibus Approval for Related Party Transactions?

Omnibus approval for related party transactions is the mechanism that lets an audit committee approve a class of repetitive dealings with a related party in advance, instead of taking each one to a meeting. It is the reason most related party transactions at a large listed company never appear as an individual board approval. This guide explains what an omnibus approval must contain, how long it lasts, and the two different omnibus approvals that share the name.

What must an omnibus approval actually say?

Regulation 23(3) does not allow a blanket sign-off. The audit committee must first lay down criteria in line with the company's related party transaction policy, and satisfy itself both that the omnibus approval is needed and that it is in the interest of the listed entity. The approval itself must specify:

• the name or names of the related party, the nature of the transaction, the period, and the maximum amount of transactions that may be entered into;
• the indicative base price or current contracted price, and the formula for any price variation;
• any other conditions the audit committee thinks fit.

The approval is only available for transactions that are repetitive in nature. A one-off deal does not qualify.

What about a transaction nobody saw coming?

There is a proviso for exactly that, and it carries the only hard number in the sub-regulation. Where the need for a related party transaction cannot be foreseen and the details above are not available, the audit committee may still grant omnibus approval, subject to the value not exceeding rupees one crore per transaction.

The two omnibus approvals that share one name

This is the distinction that gets lost, because both are called omnibus approval and both have a one year figure attached. They are granted by different bodies, cover different transactions, and their one year works differently.

An approval granted at an annual general meeting therefore does not expire on a fixed anniversary. It runs to the next AGM, which is a moving date. An approval granted at an extraordinary general meeting runs on a fixed one year clock. Same words, two different tests.

What keeps an omnibus approval honest?

The quarterly review. Regulation 23(3)(d) requires the audit committee to review, at least quarterly, the details of related party transactions entered into by the listed entity or its subsidiary pursuant to each of the omnibus approvals given. Approval in advance is paired with inspection in arrears.

The subsidiary limb in both the approval and the review was inserted by the LODR (Third Amendment) Regulations, 2024 with effect from 13 December 2024. Before that, the sub-regulation spoke only of the listed entity.

Which transactions escape Regulation 23 entirely

Sub-regulations (2), (3) and (4) do not apply to transactions between two public sector companies, or between a holding company and its wholly owned subsidiary, among the listed exemptions. A transaction that never needed approval will not appear in an omnibus approval record.

Reading this against the filings

The related party transaction framework sets what counts as related and what counts as material. The disclosure of what was actually transacted goes to the exchanges half-yearly as part of the Integrated Filing (Financial), and how to check related party transactions walks that record. Omnibus approval sits between the two: it is the reason a transaction appears in the disclosure without a matching individual approval.

Flock reports the filings themselves, dated and linked to source. Not investment advice.