SEBI exempts Waaree promoter family’s trust stake transfer from open offer requirement

The Securities and Exchange Board of India (SEBI) has officially exempted the promoter family of solar panel manufacturer Waaree Energies Limited from the mandatory open offer requirements under its Takeover Regulations.

The order clears the path for a massive, non-commercial internal restructuring designed strictly for succession planning within the founding family.

1. Structure of the Share Transfer

The application was moved by the C.T. Doshi Family Trust (an irrevocable and discretionary private trust). The restructuring consolidates a controlling stake of 63.22% under the trust through a dual-track transfer from 91-year-old family patriarch and promoter, Chimanlal Tribhuvandas Doshi:

• Direct Share Transfer: Chimanlal Doshi will transfer 12.90 crore equity shares, representing a 44.88% direct stake in Waaree Energies, straight into the C.T. Doshi Family Trust.
• Indirect Share Transfer: The trust will also acquire 1,99,999 shares (nearly 100%) of Waaree Sustainable Finance Private Limited, a promoter group entity. Since this entity holds a significant chunk of Waaree Energies, the move transfers an additional 18.34% indirect stake to the trust.
• Zero Consideration: Both transfers are being executed entirely as an estate-planning exercise without any monetary exchange or commercial consideration.

2. Why SEBI Granted the Exemption

Ordinarily, under the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, any entity acquiring a direct or indirect stake that crosses prescribed thresholds must launch a mandatory public open offer to buy out minority shareholders.

However, SEBI and its Takeover Panel waved the requirement based on several protective guardrails:

Plaintext

[ SEBIRestructuring Benchmarks ]

├── Identity of Control  ──► Trustees and beneficiaries are strictly immediate family & descendants
├── Cap Table Stability  ──► Total promoter shareholding stays completely flat at 64.22%
└── Public Protection    ──► Public shareholding remains untouched at 35.78% (Zero dilution/exit risk)

The Regulatory Curveball

A technical hurdle emerged because SEBI’s Master Circular typically requires a transferor to be officially disclosed as a “promoter” for at least three consecutive years to qualify for succession exemptions. Because Waaree Energies only held its blockbuster initial public offering (IPO) on October 28, 2024, Chimanlal Doshi had been a listed promoter for under two years.

The Takeover Panel bypassed this timeline constraint by noting that Doshi had been explicitly disclosed and vetted as the core promoter in Waaree’s prior draft red herring prospectuses (DRHPs) filed in 2021 and 2023, ensuring long-term continuity of control.

3. Compliance Deadlines and Validity

The exemption does not give the promoter group an open-ended timeline. SEBI has attached two immediate reporting and operational mandates to the relief order:

Regulatory Parameter	Condition Placed by SEBI
Exemption Window	The C.T. Doshi Family Trust has exactly one year to execute the entire direct and indirect share transfer.
Post-Acquisition Reporting	The trust must submit a meticulous compliance report to SEBI within 21 days of finishing the transfer.
Management & Control	No external or professional third-party trustees can be given voting control over the trust assets; control must remain strictly inside the Doshi lineage.