Small Investors Body Urges SEBI to Restore Castrol India Open Offer Price to Rs 210.95
The Small Investors’ Welfare Association (SIREN) has approached the Securities and Exchange Board of India (SEBI), challenging a deduction of Rs 11.50 per share from the enhanced open offer price for Castrol India Limited. In a formal representation submitted on November 9, 2026, the retail shareholder body requested the market regulator to restore the open offer price to Rs 210.95 per share from the revised offer price of Rs 199.45.
The dispute stems from the open offer launched by Motion JVCo Limited along with persons acting in concert (PACs)—including affiliates of US-based investment firm Stonepeak and Canada Pension Plan Investment Board (CPPIB)—to acquire up to 25,71,71,820 equity shares, or 26 percent of Castrol India's equity capital.
The Price Adjustment Breakdown
The indirect acquisition was initially triggered after BP agreed to divest a controlling 65 percent stake in its global lubricants business. When the initial public announcement was filed on December 24, 2025, the base open offer price was set at Rs 194.04 per share.
Under Regulation 8 of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, delay between the public announcement and the detailed public statement required an enhancement of 10 percent per annum. Adding an enhancement of Rs 16.91 pushed the computed offer value to Rs 210.95 per share.
However, the detailed public statement released on November 6, 2026, fixed the final open offer price at Rs 199.45 after reducing Rs 11.50 per share as a dividend adjustment.
Violation of Regulation 8(9) Alleged
In its petition to SEBI, SIREN contended that the acquirer’s deduction of dividends violates Regulation 8(9) of the Takeover Code. Under these provisions, open offer prices can only be adjusted downwards for corporate dividend payouts if the intervening dividend exceeds 150 percent of the average annual dividend paid over the preceding three financial years.
Key Dividend and Threshold Metrics Cited by SIREN:
- Castrol India operates on a calendar-year accounting cycle, making FY22, FY23, and FY24 the three relevant financial years preceding the December 2025 announcement.
- Dividends attributable to those years stood at Rs 6.50, Rs 7.50, and Rs 13.00 per share, respectively, adding up to an aggregate payout of Rs 27.00 per share.
- The three-year annual dividend average is Rs 9.00 per share, which establishes the 150 percent regulatory threshold at Rs 13.50 per share.
- The intervening dividends deducted by the acquirer totaled only Rs 11.50 per share—consisting of a Rs 5.25 final dividend for FY25 and a Rs 6.25 interim dividend for FY26.
Because the cumulative intervening payout of Rs 11.50 does not breach the Rs 13.50 threshold, the investor association argued that the acquirers have no legal ground to penalise tendering public shareholders by clipping the offer consideration.
Omission in Initial Disclosures
SIREN also pointed out that the initial public announcement in December 2025 made no explicit disclosure regarding a proposed downward adjustment for dividend distributions, even while highlighting statutory enhancements. The association questioned whether acquirers could retrospectively introduce material adverse adjustments that diminish the consideration payable to minority public shareholders.
The open offer, managed by UBS Securities India Private Limited, is valued at over Rs 5,129 crore at the revised price. The tendering period is scheduled to run from December 24, 2026, to January 7, 2027. Small shareholders and market watchers now await SEBI’s review of the representation, as a ruling in favor of the investor body would mandate an additional payout of Rs 11.50 per tendered share.
