What is creeping acquisition? Plain-English guide
Creeping acquisition is the room the SEBI takeover code gives a large shareholder to keep buying, up to a limit, without launching a full open offer. Under Regulation 3(2) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, a person or group already holding between 25% and 75% of a company can acquire up to 5% more voting rights in a financial year without triggering a mandatory open offer. Cross that 5% in the year, and the open offer rule kicks in.
Definition
Creeping acquisition
is the allowance under Regulation 3(2) of the SEBI (SAST) Regulations, 2011 for a shareholder holding between 25% and 75% of a company to buy up to 5% more voting rights in a financial year without a mandatory open offer. Beyond 5%, an open offer is triggered. Source: SEBI.
How does the creeping acquisition limit work?
The takeover code has two acquisition triggers. Crossing 25% of voting rights the first time triggers an open offer under Regulation 3(1). Above that, a holder is inside the creeping band: up to the maximum permissible limit, they can add voting rights slowly, but only up to 5% in any financial year ending March 31. This lets promoters consolidate gradually while still forcing an open offer once buying becomes substantial.
How much triggers an open offer?
The creeping limit is a hard annual cap.
5%
Voting rights a holder between 25% and 75% can add in a financial year before an open offer is triggered
Source: SEBI (SAST) Regulations, 2011, Regulation 3(2)
Go past 5% in the year and the acquirer must make an open offer to public shareholders for at least 26% of the company, under Regulation 7(1). The same open offer is triggered by first crossing 25%, or by acquiring control. For the full trigger, see what an open offer is under SEBI SAST, and for how the two rules sit together, see creeping acquisition vs open offer.
Where does creeping acquisition show up?
Each step is visible in the filings. The quarterly shareholding pattern shows promoter and large-holder stakes moving over time, and acquisitions above the disclosure thresholds are reported to the exchanges under the takeover code, dated.
So creeping acquisition is the slow, capped route a big holder can take before the open offer rule forces a wider buyout. Flock reads the public disclosures behind those stake changes and keeps each one dated and sourced. What any of it means for your own decision is your call to make.
Frequently asked questions
What is creeping acquisition under SEBI rules?
Creeping acquisition is the room a shareholder holding between 25% and 75% has to buy up to 5% more voting rights in a financial year without triggering a mandatory open offer, under Regulation 3(2) of the SEBI (SAST) Regulations, 2011. Source: SEBI.
How much can be acquired without an open offer?
A holder already above 25% but below the maximum permissible limit can add up to 5% of voting rights in a financial year ending March 31 without an open offer. Crossing 5% in that year triggers one. Source: SEBI (SAST) Regulations, 2011, Regulation 3(2).
What happens if the 5% creeping limit is breached?
Acquiring more than 5% of voting rights in a financial year, while holding between 25% and 75%, triggers a mandatory open offer to public shareholders for at least 26% of the company's shares. Source: SEBI (SAST) Regulations, 2011.
Where can I see creeping acquisitions happening?
Changes in promoter and large-holder stakes appear in the quarterly shareholding pattern that listed companies file with NSE and BSE, and in acquisition disclosures under the takeover code. Source: SEBI, NSE, BSE.
Flock tracks these filings, sourced, dated, and linked back to the original. See what smart-money entities disclosed, without the guesswork about what it means.
Disclosures shown are public regulatory filings. Data may be delayed or incomplete. Smart-money entities may no longer hold positions shown. Not investment advice.