A dispute has emerged over the open offer price for Castrol India shares after the Small Investors’ Welfare Association (SIREN) approached the Securities and Exchange Board of India (SEBI), challenging a ₹11.50 per-share deduction made by the acquirer. The investor group has argued that the reduction is inconsistent with the takeover regulations and has asked the regulator to restore the offer price to ₹210.95 from ₹199.45 per share.
The dispute centres on how dividends should be calculated under Regulation 8(9) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011. The acquirer, Motion JVCo Ltd, deducted the dividends from the enhanced offer price, while SIREN maintains that the relevant dividend threshold was not crossed. If the offer receives full acceptance for all 25.71 crore shares, the disputed reduction could affect shareholder consideration by approximately ₹295.75 crore.
Why Has Castrol India’s Open Offer Price Been Reduced?
The open offer is part of the proposed acquisition involving Motion JVCo Ltd and persons acting in concert with it.
The initial public announcement, issued on December 24, 2025, fixed the offer price at ₹194.04 per share. The price was subsequently enhanced by 10%, taking it to ₹210.95 per share.
However, the detailed public statement issued on November 6, 2026, reduced the offer price by ₹11.50 to ₹199.45 per share, citing dividend adjustments.
The deduction comprises two dividend payments made by Castrol India:
- Final dividend: ₹5.25 per share, relating to FY25.
- Interim dividend: ₹6.25 per share, relating to FY26.
- Total dividend adjustment: ₹11.50 per share.
SIREN has challenged the calculation, arguing that the acquirer has applied the takeover regulations incorrectly and reduced the consideration payable to minority shareholders.
The association submitted its representation to SEBI on November 9, 2026, seeking regulatory intervention before the offer is finalised.
What Does Regulation 8(9) of SEBI Takeover Rules Say?
The central issue concerns Regulation 8(9) of the SEBI SAST Regulations, 2011.
The provision deals with adjustments to open-offer prices when dividends are paid during the relevant period. It permits an adjustment where an intervening dividend exceeds 150% of the average dividend per share paid during the three financial years preceding the public announcement.
The provision is intended to address situations in which dividend payments could affect the economic value of an acquisition offer.
However, the interpretation of the three-year dividend average has become the main point of disagreement.
The two sides differ over whether the calculation should use the dates on which dividends were actually paid or the financial years to which those dividends relate.
That distinction changes the average dividend and, consequently, the threshold above which an adjustment may be made.
SIREN Says Dividends Should Be Calculated by Financial Year
SIREN argues that the three financial years preceding the December 24, 2025 public announcement should be considered based on the financial years to which the dividends relate.
Since Castrol India follows a January-to-December financial year, the association has used FY22, FY23 and FY24 for its calculation.
Its figures are:
| Financial year | Dividend per share |
|---|---|
| FY22 | ₹6.50 |
| FY23 | ₹7.50 |
| FY24 | ₹13.00 |
| Total | ₹27.00 |
| Three-year average | ₹9.00 |
Under this calculation, 150% of the average dividend of ₹9 would be ₹13.50 per share.
The intervening dividends of ₹11.50 would therefore remain below the threshold.
SIREN argues that no deduction should have been made from the open-offer price because the combined dividend payment does not exceed the ₹13.50 limit.
If SEBI accepts this interpretation, the association wants the offer price restored to ₹210.95 per share.
Why the Acquirer’s Calculation Is Being Questioned
The acquirer’s calculation uses dividends based on the payment-date approach.
According to the figures cited in the dispute, dividends paid during the three preceding years produce an average of approximately ₹6.83 per share.
Applying the 150% threshold results in approximately ₹10.25 per share.
Since the combined intervening dividend of ₹11.50 exceeds that amount, the acquirer has deducted the full ₹11.50 from the enhanced offer price.
This brings the price down from ₹210.95 to ₹199.45.
SIREN disputes both the interpretation and the extent of the adjustment. It argues that dividends should be associated with the financial years to which they relate rather than simply grouped by payment dates.
The association has also questioned whether the acquirer should be permitted to introduce a dividend deduction after the original public announcement disclosed the enhanced offer price without expressly indicating that such an adjustment would be made.
Investor Group Offers an Alternative Calculation
SIREN has also presented an alternative calculation in case SEBI decides that dividends must be counted according to their actual payment dates.
Under this approach, the association accepts the ₹10.25 threshold derived from the payment-date calculation but argues that only the amount exceeding that threshold should be deducted.
The calculation would be:
| Particulars | Amount per share |
|---|---|
| Combined intervening dividends | ₹11.50 |
| 150% threshold | ₹10.25 |
| Amount exceeding threshold | ₹1.25 |
| Enhanced open-offer price | ₹210.95 |
| Proposed adjusted price | ₹209.70 |
Under this interpretation, the offer price would be ₹209.70 instead of ₹199.45.
SIREN has cited the ADC India open offer as an example of how dividend adjustments have been handled in another transaction. However, it acknowledges that the example is not a binding legal precedent.
Legal Experts Question Whether the Entire Dividend Can Be Deducted
The dispute has also attracted attention from legal and market professionals.
CA Arun Goenka, founder of SIREN, has questioned the decision to make the deduction, arguing that the original public announcement did not expressly disclose the possibility of a dividend adjustment.
He has also highlighted the wording of Regulation 8(9), which states that the offer price “may be adjusted”. According to Goenka, this language indicates that the adjustment is discretionary rather than automatic.
Ravi Prakash, partner at Corporate Professionals Advisors & Advocates, has also supported the need to examine the legal basis for the deduction.
He has raised several questions about the calculation, including whether the dividends qualify for adjustment, whether separate payments can be aggregated and whether the entire ₹11.50 can be deducted or only the amount exceeding the prescribed threshold.
These are arguments made by the investor group and legal experts, not conclusions reached by SEBI or a court.
The regulator’s interpretation will be important in determining how the provision applies to the transaction.
Dispute Could Affect Nearly ₹296 Crore in Shareholder Consideration
The financial impact of the disputed deduction could be significant if the open offer receives full acceptance.
Motion JVCo’s offer covers up to 25.71 crore equity shares of Castrol India.
The difference between the enhanced price of ₹210.95 and the revised price of ₹199.45 is ₹11.50 per share.
| Particulars | Details |
|---|---|
| Maximum shares under the offer | 25.71 crore |
| Original enhanced offer price | ₹210.95 |
| Revised offer price | ₹199.45 |
| Disputed reduction per share | ₹11.50 |
| Potential difference at full acceptance | Approximately ₹295.75 crore |
The ₹295.75 crore figure represents the potential difference in shareholder consideration if all shares covered by the offer are tendered and accepted. It is not a confirmed loss or an amount that has already been paid.
SIREN has asked SEBI to examine the interpretation of Regulation 8(9), seek explanations from Motion JVCo and its merchant banker UBS Securities India, and require corrective disclosures before shareholders tender their shares.
The Bigger Picture
The Castrol India dispute highlights how technical interpretations of takeover regulations can have a substantial financial impact on minority shareholders. A relatively small difference in the calculation of dividend thresholds can change the price offered to investors across millions of shares. It also raises questions about disclosure standards and the extent to which an acquirer can revise an announced offer price through subsequent adjustments.
For SEBI, the matter could become an important test of how Regulation 8(9) should be interpreted in situations involving dividends paid across different financial years. The regulator’s decision may influence future open offers and provide greater clarity to acquirers, merchant bankers and public shareholders. Until SEBI responds, the competing calculations remain disputed interpretations rather than an established regulatory finding.
Looking Ahead
The immediate focus will be on SEBI’s response to SIREN’s November 9 representation and whether the regulator seeks clarification from Motion JVCo and UBS Securities India. The outcome could determine whether the open-offer price remains at ₹199.45, returns to ₹210.95 or is revised under an alternative calculation. Shareholders will also need to monitor the formal offer documents and any subsequent regulatory disclosures.
Beyond this transaction, the dispute could prompt closer scrutiny of dividend-adjustment clauses in takeover offers. Clearer guidance on how the three-year average should be calculated and whether the full dividend or only the excess amount can be deducted would help reduce uncertainty in future acquisitions. For now, the central question remains whether the ₹11.50 reduction is legally justified under the SEBI takeover framework.
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SEO Title: Castrol Open Offer: Investors Challenge ₹11.50 Price Cut Before SEBI
Meta Description: SIREN challenges the ₹11.50 deduction in Castrol India’s open offer, seeking SEBI intervention to restore the price to ₹210.95 per share.
URL Slug: castrol-open-offer-investors-challenge-1150-price-cut-sebi
Focus Keyphrase: Castrol India open offer price
Secondary Keywords: Castrol open offer 2026, SEBI takeover regulations, Motion JVCo, SIREN investor association, Castrol dividend adjustment, Regulation 8(9), Castrol India shares
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