The Small Investors’ Welfare Association (SIREN) has approached the Securities and Exchange Board of India (SEBI) over a reduction in the open offer price for Castrol India shares, The Indian Express reported. The association has challenged the deduction of Rs 11.50 per share, saying it goes against the investor-protection rules under SEBI’s Takeover Regulations.
The Indian Express, citing a representation dated November 9, said SIREN has asked the market regulator to restore the open offer price to Rs 210.95 per share from the revised price of Rs 199.45.
It has argued that the dividends paid by Castrol India should not be deducted because the total dividend of Rs 11.50 does not cross the limit set under Regulation 8(9) of the SEBI Substantial Acquisition of Shares and Takeovers (SAST) Regulations, 2011.
The dispute concerns the open offer made by Motion JVCo Ltd and persons acting in concert with it.
The initial public announcement, issued on December 24, 2025, had set the open offer price at Rs 194.04 per share. The acquirer later increased the price by 10%, taking it to Rs 210.95 per share.
However, the detailed public statement issued on November 6, 2026, reduced the offer price by Rs 11.50 per share to account for dividends paid by Castrol India. This brought the final offer price down to Rs 199.45 per share.
SIREN has questioned the basis of this deduction and said the calculation does not follow the correct interpretation of the takeover rules.
The association’s main argument is that the three financial years before the public announcement should be considered based on the financial years to which the dividends belong, rather than the dates on which the company actually paid them.
Since Castrol India’s financial year follows the calendar year, SIREN says the three relevant financial years before the December 24, 2025 announcement are FY22, FY23 and FY24.
According to the association, Castrol India paid dividends of Rs 6.50 per share for FY22, Rs 7.50 for FY23 and Rs 13 for FY24. The total dividend over these three years comes to Rs 27 per share, bringing the average to Rs 9 per share.
According to the Indian Express, under Regulation 8(9), the dividend adjustment is allowed when the intervening dividend exceeds 150% of the average dividend paid during the three preceding financial years.
Based on SIREN’s calculation, 150% of the average dividend of Rs 9 comes to Rs 13.50 per share.
The association has argued that the total intervening dividend of Rs 11.50 does not cross this limit and, therefore, should not be deducted from the open offer price.
The Rs 11.50 dividend adjustment includes a final dividend of Rs 5.25 per share relating to FY25 and an interim dividend of Rs 6.25 per share relating to FY26.
SIREN says these dividends together remain below the Rs 13.50 threshold prescribed under the regulations. It has, therefore, argued that the acquirer should not be allowed to reduce the offer price on this basis.
The association has also raised concerns about the timing of the adjustment. It mentioned that the original public announcement had mentioned the enhanced offer price but did not say that any dividend-related deduction would be made later.
It has questioned whether the acquirer can introduce such a reduction after announcing the enhanced price, particularly when it directly affects the amount minority shareholders would receive for their shares.
The association has also suggested an alternative in case SEBI interprets the regulation based on the actual dates on which dividends were paid, rather than the financial years to which they relate.
Under this interpretation, SIREN has requested that only Rs 1.25 per share, the amount above the prescribed threshold, should be deducted.
This would take the open offer price to Rs 209.70 per share instead of Rs 199.45.
According to the Small Investors’ association, the difference between the original enhanced offer price of Rs 210.95 and the revised price of Rs 199.45 would amount to approximately Rs 295.75 crore if the offer for up to 25.71 crore equity shares receives full acceptance.
The association has urged SEBI to examine whether the dividend deduction has a proper legal basis under the takeover regulations.
It has also asked the regulator to direct the acquirer and its merchant banker to provide a detailed explanation for the reduction before the open offer price is finalised.