SEBI exempts Varnam Trust from takeover rules in Elgi Rubber share transfer

This order grants an exemption to Varnam Securities Trust from SEBI's takeover regulations for a proposed acquisition of shares in Elgi Rubber Company Limited. The acquisition is a non-commercial transfer of shares from the promoter, Sudarsan Varadaraj, to a family trust for succession planning.

Elgi Rubber Company Limited (Target Company), Varnam Securities Trust (Acquirer Trust), Sudarsan Varadaraj (Promoter/Trustee), LRG Technologies Limited (Intermediary Entity), Harsha Varadaraj, Varshini Varadaraj, Jairam Varadaraj, Sumanth Ramamurthi, Anvar Jay Varadaraj, Maya Jay Varadaraj, Varun Jay Varadaraj, Elgi Equipments Limited, Christopher James Eden, Srinidhi Guruswamy, Bharathi Varadaraj, SR Venkatachalam, MD Selvaraj.

• SEBI granted an exemption from Regulations 3(1), 4, and 5 of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011.
• The proposed acquisition involves a direct transfer of 2,13,15,350 shares (42.59%) and an indirect acquisition via LRG Technologies (7.08%) by Varnam Securities Trust.
• The transaction is structured as a gift without any consideration.
• The trust is described as a 'mirror image' of the promoters' holdings, with no change in beneficial ownership or control.
• The Acquirer Trust confirmed compliance with conditions in Chapter 8 of the SEBI Master Circular dated February 16, 2023, including that trustees/beneficiaries are only immediate relatives or lineal descendants.

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