SECURITIES AND EXCHANGE BOARD OF INDIA

ORDER

WTM/GA/128/CFD/1/07

1.0 BACKGROUND

1.1 Abbott India Ltd. (hereinafter referred to as the target company) is a company incorporated under the Companies Act, 1956, having its registered office at Corporate Park, Sion Trombay Road, Mumbai- 400 071. The equity shares of the target company are listed on the Bombay Stock Exchange Ltd. Abbott Capital India Ltd. (hereinafter referred to as ‘the acquirer’) is the promoter of the target company and is presently holding 61.70% of the equity shares of the target company.

2.0  APPLICATION FOR EXEMPTION

2.1  The target company has announced its plan to buy-back its shares from the shareholders and due to the said buy-back offer, the voting rights of the acquirer would increase from 61.70% to 65.14%, in case of 100% response to the said buy-back offer and the acquire not offering to sell any shares held by it in the said proposed buy-back offer.

2.2   Kotak Mahindra Capital Company Ltd., filed an application dated October 28, 2006 on behalf of the target company and the acquirer with Securities and Exchange Board of India (hereinafter referred to as SEBI) under regulation 4(2) read with regulation 3(1) (l) of Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997, (hereinafter referred to as the Takeover Regulations). Since, the post buy-back shareholding of acquirer may increase to a level beyond 61.70%, the exemption is sought from the applicability of regulation 11(2) of the Takeover Regulations. In the said application, the following submissions are made :-

a. The increase in the shareholding of the acquirer is incidental to the buyback proposal of the target company and is not a pro-active acquisition.

b. The acquirer is already in control over the target company.

c. The target company has accumulated free reserves as well as favourable liquidity and the proposed buyback is expected to contribute to the overall enhancement of the shareholders value resulting in an increase in the return on equity of the target company.

e. The proposed buyback will provide an exit opportunity to institutional shareholders/large retail shareholders, which may otherwise not be available whilst at the same time safeguarding the interest of continuing shareholders.

f. Even after buy-back of the equity shares by the target company, the voting rights of the acquirers shall remain maximum at the level of 65.14%, which meets with the requirements of the Listing Agreement with the stock exchanges where the shares of the target company are listed as the minimum public shareholding in target company shall remain at a level more than 25%.

g. The price at which the buy-back is proposed is Rs. 650/- and is higher than the book value of Rs. 141.65 per share (as on November 30, 2005).

2.3 The shareholding pattern of the target company before and after the proposed acquisition is as under:

*Assuming full acceptance of the Buyback

3.0  RECOMMENDATION OF THE TAKEOVER PANEL –

3.1  The aforesaid application dated October 28, 2006 was forwarded by SEBI to the Takeover Panel in terms of sub-regulation (4) of Regulation 4 of the Takeover Regulations. The application was considered by the Takeover panel. While forwarding its recommendations vide report dated 13.12.06, the Takeover Panel has stated as under:

“After going through the entire set of papers provided by company including the board resolution and financial positions of the company, then takeover committee finds that this is a fit case for grant of exemption as claimed and the interest of the shareholders are not likely to be affected adversely, in fact they would benefit as a result and the committee recommends accordingly that exemption be granted.”

4.0  FINDINGS :

4.1 I have carefully considered the aforesaid application dated October 28, 2006 filed on behalf of the acquirers, the above mentioned recommendations of the Takeover Panel and relevant materials available on record.

4.2 At the outset, I note that the increase in shareholding of the acquirers is incidental to the buy back plan of the target company. The acquirer has submitted that it does not intend to tender its shares in the buy back and had undertaken not to transact in the shares of the target company till the closure of the buy back and that the number of shares held by acquirer would not change after the proposed buy back. I also note that there would not be any change in control over the target company as the acquirer is the promoters of the target company and has control over the target company. I also note that from the submission of the acquirers that, even in case of 100% response in the proposed buy-back offer and successful completion of the said buy-back, the public share holding in the target company would be at a level more than what is required for meeting the requirements of minimum public shareholding as per the listing agreements with the stock exchanges where the shares of the target company are listed.

4.3 In view of the above facts and circumstances, I agree with the recommendations of the Takeover Panel and consider the present case as a fit case for granting exemption from making a public announcement as required under regulation 11(2) of the Takeover Regulations.

5.0 ORDER

5.1  In view of the above findings, I , in exercise of the powers conferred upon me by virtue of section 19 of the Securities and Exchange Board of India Act, 1992 read with sub - regulation (6) of regulation 4 of Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997, hereby grant exemption to the acquirer, Abbott Capital India Ltd. from complying with the provisions of regulation 11(2) of Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 with regard to the increase in their voting rights from 61.70% to 65.14%, consequent to the proposed buy-back offer of Abbott India Ltd., the target company.

  G. ANANTHARAMAN

   WHOLE TIME MEMBER

SECURITIES AND EXCHANGE BOARD OF INDIA

Place: Mumbai

Dated: 24-01-2007