Open Offer

An open offer is a mandatory offer an acquirer must make to public shareholders when acquiring substantial ownership or control of a listed company — under SEBI's SAST (Substantial Acquisition of Shares and Takeovers) Regulations, crossing 25% shareholding triggers an offer for at least a further 26% of the company from the public.

The offer price is set by a SEBI formula (broadly, the highest of the negotiated deal price and volume-weighted market prices over look-back windows), so public shareholders get at least what the seller got. Existing large holders also face 'creeping acquisition' limits — buying beyond about 5% in a financial year triggers the same obligation even without a new acquirer.

For shareholders the decision is whether to tender in the offer or stay invested with the new owner. If more shares are tendered than the acquirer must buy, acceptance is proportionate; if the acquirer ends up above the 75% maximum promoter holding, they must sell back down to restore the 25% minimum public shareholding.

Open offers are also where deal arbitrage lives: the gap between market price and offer price reflects timing, acceptance-ratio expectations and completion risk. Read the offer documents — counter-offers and price revisions do happen in contested takeovers.

How stocks tend to react

The stock typically re-rates toward the offer price on announcement; whether it trades above or below depends on expected acceptance ratios and on whether the market smells a bidding war. After the offer closes, the stock often trades on the new owner's plans rather than the old story.

MarketPing measures this instead of guessing: every analysed announcement carries the stock's actual price reaction across 14 horizons, and the Reaction Lab aggregates how each category of announcement has historically moved stocks.

Related terms

Educational content, not investment advice. Regulations and tax rules change — verify current rules before acting.