SEBI Takeover Code 2025 Amendment: Independent Registered Valuer Now Mandatory for Open Offer Pricing

Last updated: 10 June 2026 | By CS Sapna Malpani, Practising Company Secretary, Bangalore

On 3 December 2025, SEBI quietly rewrote who gets to put a price on your company in a takeover. The SEBI takeover code 2025 amendment takes the open offer pricing pen out of the hands of the acquirer, the manager to the open offer, and the acquirer-appointed chartered accountant, and hands it to an independent registered valuer under Section 247 of the Companies Act, 2013. For any listed company facing an acquirer, and for every IPO-bound founder who will one day be on the other side of an open offer, the number that decides what minority shareholders are paid now comes from a different chair. Get the appointment wrong and the offer can stall, the price can be revised upward, and the penalty under Section 15H of the SEBI Act runs up to ₹25 crore or three times the gains.

Why the SEBI takeover code 2025 amendment matters

The Takeover Code, formally the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, is the rulebook that protects public shareholders when someone buys a large stake in a listed company. The mechanism at its heart is the open offer: an acquirer who crosses the line must offer to buy out the public at a fair price, so ordinary shareholders get a clean exit on the same terms as the controlling buyer.

The fairness of that exit depends entirely on one figure, the open offer price. For years, where the shares were infrequently traded or the deal was an indirect acquisition, that price rested on a valuation arranged by the acquirer’s side, through the manager to the open offer, an independent merchant banker, or a chartered accountant with at least ten years of experience. The obvious problem: the party paying the bill had a hand in shaping the number that decided what it would pay. The 2025 amendment closes that conflict. It is a governance correction aimed squarely at the integrity of the price, and it lands at a time when India is seeing a steady run of open offers across mid-cap names.

The open offer trigger, at a glance

What exactly the SAST amendment 2025 changed

The amendment runs through three surgical edits to the 2011 regulations. The notification, signed by Executive Director Amit Pradhan, reads plainly once you map it to the older text.

1. A new definition of “valuer.” A fresh clause (zaa) in Regulation 2(1) says a valuer “shall have the same meaning as assigned to it under section 247 of the Companies Act, 2013.” That single line imports the entire registered-valuer regime, IBBI registration, the Companies (Registered Valuers and Valuation) Rules, 2017, and the discipline that comes with it, into the takeover code.

2. Regulation 8 (offer price) rewritten. In sub-regulations 8(2)(e) and 8(4), the words “the acquirer and the manager to the open offer” are replaced with “an independent registered valuer.” Sub-regulation 8(16) is recast so that the Board may, at the acquirer’s expense, require valuation of the shares by an independent registered valuer. The cost stays with the acquirer; the choice of valuer no longer does.

3. Regulation 9 (indirect acquisitions) rewritten. In Regulation 9(5)(c), the old phrase, “merchant banker (other than the manager to the open offer) or an independent chartered accountant having a minimum experience of ten years,” is replaced by a single word: “registered valuer.” The ten-year-CA route and the merchant-banker route are gone.

To avoid disrupting deals already in motion, the amendment gives a clear runway. As the notification puts it, the earlier merchant banker or chartered accountant “shall complete the ongoing valuation assignment which has been undertaken prior to the coming into force” of the amendment “within a period of nine months.” Anything started fresh after commencement goes to a registered valuer.

Before and after: who values your open offer

What is a registered valuer under Section 247?

Section 247 of the Companies Act, 2013 created a formal profession of registered valuers. A registered valuer is an individual or entity registered with the Insolvency and Bankruptcy Board of India (IBBI), which acts as the authority under the Companies (Registered Valuers and Valuation) Rules, 2017. A registered valuer must hold the prescribed qualifications and pass the valuation examination, belong to a recognised valuer organisation, and follow valuation standards across three asset classes, securities or financial assets, land and building, and plant and machinery. Open offer valuations fall under the securities or financial assets class.

The reason this matters for takeovers is independence with accountability. A registered valuer signs the valuation report, carries statutory duties under Section 247(2), and faces consequences under Section 247(3) for a report that is not done with due diligence or that is false in material particulars. Bringing that regime into SAST means the open offer price now carries the weight of a regulated professional opinion rather than an acquirer-side estimate.

What you must do now: a step-by-step for acquirers and target boards

If you are planning an acquisition of a listed company, or you sit on the board of a potential target, the sequence below keeps the open offer clean under the amended code.

Step 1: Confirm the trigger. Map the proposed acquisition against Regulation 3 (25% threshold and 5% creeping limit) and Regulation 4 (control). A control acquisition triggers an offer even below 25%, so do not rely on percentage alone.

Step 2: Classify the shares. For frequently traded shares, the price is driven largely by volume-weighted market prices over defined look-back periods. For infrequently traded shares and indirect acquisitions, valuation parameters decide the floor price, and this is precisely where the registered valuer now steps in.

Step 3: Appoint the right valuer. Engage an IBBI-registered valuer for the securities or financial assets class who is independent of both the acquirer and the manager to the open offer. Check the registration is current on the IBBI valuer database before signing the engagement letter.

Step 4: Document the methodology. The valuer should record the approaches considered, book value, comparable companies, and other accepted methods, and explain the weights. A well-reasoned report is your defence if the price is later questioned.

Step 5: Run the open offer timeline. Through the manager to the open offer, make the public announcement on the trigger date, publish the detailed public statement, file the draft letter of offer with SEBI, and honour the offer and payment timelines. The valuation is one input into a tightly scheduled process; a late or weak valuation delays everything downstream.

The real cost of getting it wrong

The fine is the headline, but the operational cost usually hurts more. A takeover runs on a market window and a financing clock. A valuation that SEBI questions can mean a revised offer, a fresh round of filings, and weeks of delay while the deal sits exposed to price movement and rival bidders. For a listed target, that uncertainty also drags on the share price and the board’s credibility.

According to CS Sapna Malpani

According to CS Sapna Malpani, the 2025 amendment should be read as part of a wider pattern, not a one-off. “SEBI has spent the last two years moving valuation and disclosure judgments away from interested parties and towards independent professionals,” she notes. “Bringing Section 247 registered valuers into the takeover code lines it up with how valuation already works in mergers, in insolvency, and in related-party pricing. The direction is consistent: the person who benefits from a number should not be the person who certifies it.”

Her forward read for boards: expect the registered-valuer report to become a standard diligence item that target boards, independent directors and proxy advisers scrutinise closely. Acquirers who treat the valuer as a box-ticking appointment, rather than engaging a credible firm early, will find their offer price challenged more often. The smart move is to build the valuer engagement into deal planning from day one, alongside the manager to the open offer, so the price rests on a defensible, independent opinion before the public announcement goes out.

How this compares with related valuation rules

Founders often confuse the different places a “valuation” is required, so it helps to separate them. Under FEMA, a share issue to a non-resident needs a valuation by a SEBI-registered merchant banker or a practising chartered accountant under the pricing guidelines. Under Section 62(1)(c) of the Companies Act, a preferential allotment needs a registered valuer’s report. Under the SAST code, after this amendment, the open offer price for infrequently traded shares and indirect acquisitions needs an independent registered valuer. Three different transactions, three different rule sets, and now two of them, preferential allotment and takeover pricing, converge on the same Section 247 registered valuer. The practical takeaway is to confirm which valuation rule governs your specific transaction before you appoint anyone, because using the wrong category of valuer can invalidate the exercise.

Frequently Asked Questions

What is the SEBI takeover code 2025 amendment?

The SEBI (Substantial Acquisition of Shares and Takeovers) (Amendment) Regulations, 2025, notified on 3 December 2025 vide No. SEBI/LAD-NRO/GN/2025/283, makes an independent registered valuer mandatory for determining the open offer price under Regulations 8 and 9 of the SAST Regulations, 2011. It inserts a new definition of valuer aligned with Section 247 of the Companies Act, 2013, and removes the earlier role of the acquirer, the manager to the open offer, merchant bankers and chartered accountants in fixing the price.

Who is an independent registered valuer under the SAST amendment?

An independent registered valuer is a valuer registered with the Insolvency and Bankruptcy Board of India (IBBI) under Section 247 of the Companies Act, 2013 and the Companies (Registered Valuers and Valuation) Rules, 2017. The SAST amendment imports this exact meaning. The valuer must be independent of the acquirer and the manager to the open offer, which is the core change the 2025 amendment brings to takeover pricing.

When does the SEBI SAST amendment 2025 come into force?

The amendment comes into force on the thirtieth day from the date of its publication in the Official Gazette. The notification is dated 3 December 2025, so the provisions apply to open offers from early January 2026 onward. Valuation assignments already underway before that date get a nine-month window to be completed by the earlier merchant banker or chartered accountant.

What is the penalty for getting open offer pricing wrong under SAST?

Failure to comply with the SAST Regulations can attract a penalty under Section 15H of the SEBI Act, 1992, of up to ₹25 crore or three times the amount of profits made out of the contravention, whichever is higher. Beyond the fine, SEBI can direct the acquirer to revise the offer price upward and pay interest to shareholders for the delay, and can hold up the entire transaction.

Does the takeover code apply to unlisted or private companies?

The SAST Regulations apply to the acquisition of shares or control of listed companies. A purely private limited company is outside the takeover code. However, founders and CFOs of IPO-bound companies should understand the framework before listing, because once listed, any acquirer crossing 25% voting rights, or acquiring control, triggers a mandatory open offer where the new registered-valuer rule decides the price.

How does the registered valuer fix the open offer price?

For frequently traded shares, the offer price is largely formula-driven from market prices. For infrequently traded shares and for indirect acquisitions, valuation parameters such as book value, comparable company multiples and other accepted methods come into play. Under the 2025 amendment, that valuation must now be carried out by an independent registered valuer under Regulation 9(5)(c) and Regulation 8, instead of the acquirer-appointed merchant banker or chartered accountant.

Sources and References

• SEBI (Substantial Acquisition of Shares and Takeovers) (Amendment) Regulations, 2025, Notification No. SEBI/LAD-NRO/GN/2025/283 dated 3 December 2025 (Gazette text) — reproduced here
• SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 — SEBI
• Section 247, Companies Act, 2013 (Registered Valuers) — India Code
• Mehta & Mehta Advisory, SEBI Notification SAST Amendment, 5 December 2025 — summary
• SEBI takeovers framework and FAQs — SEBI
• Companies (Registered Valuers and Valuation) Rules, 2017 — IBBI

Disclaimer: This article is for general information and does not constitute legal or financial advice. Takeover and valuation rules turn on specific facts. Consult a practising company secretary or legal adviser before acting. CS Sapna Malpani is a Practising Company Secretary based in Bangalore.