Beyond Shareholding: Rethinking “Control” under the SEBI Takeover Regulations and Its Implications for Indian M&A

The concept of “control” under Indian the takeover law extends beyond to the percentage of shares held by an acquirer. Regulation 2(1)(e) of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 recognises control through management rights, shareholders’ agreements, voting arrangements and other means. This broad approach is increasingly significant in modern M&A, whereby minority investments may be accompanied by board representation, veto rights and other governance arrangements. The central question examined in this paper is when contractual or governance influence becomes “control” sufficient to trigger an open-offer obligation. The paper adopts a doctrinal and analytical approach, examining the SAST Regulations, SEBI decisions, Securities Appellate Tribunal (“SAT”) jurisprudence and relevant regulatory materials, alongside academic commentary on takeover law. The analysis demonstrates that neither shareholding nor individual contractual rights can, by themselves, provide a complete answer. Subhkam Ventures illustrates the difficulty of distinguishing protective rights from substantive control. The paper therefore argues for a structured, substance-based approach that considers the nature and cumulative effect of governance rights while preserving SEBI’s ability to address indirect forms of control. Greater clarity would provide investors and M&A parties with more predictable parameters without weakening protection for public shareholders.