Govt exempted from making open offer in Vijaya Bank

The Securities and Exchange Board of India (Sebi) issued an order exempting the central government from making an open offer to acquire additional 14.26 per cent stake in public sector lender Vijaya Bank through conversion of Rs 1,200 crore worth of preferential shares.

The government, which is the promoter of Vijaya Bank, had proposed to buy more than 30.46 crore shares of public sector lender through conversion of Rs 1,200 crore 'Perpetual Non-Cumulative Preference Shares (PNCPS)'.

The proposed allotment of the equity shares would hike the shareholding of the government in Vijaya Bank from 59.80 per cent to 74.06 per cent. 

This is an increase of 14.26 per cent stake by the government in the bank.

The regulator said that there would not be any change in the management control in the bank following the proposed transaction. 

Under Sebi norms, when entities who hold 25 per cent or more shareholding in a company acquire additional five or more in that particular firm, they are generally required to make an open offer. However, exemptions could be made in certain cases.