Exemption Order under Regulation 11 of SEBI (SAST) Regulations, 2011 in the matter of Taj GVK Hotels And Resorts Limited

WTM/ASB/CFD/ 1 /2023-24 SECURITIES AND EXCHANGE BOARD OF INDIA ORDER UNDER SECTION 11(1) AND SECTION 11(2)(h) OF THE SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992 READ WITH REGULATION 11(5) OF THE SECURITIES AND EXCHANGE BOARD OF INDIA (SUBSTANTIAL ACQUISITION OF SHARES AND TAKEOVERS) REGULATIONS, 2011. IN THE MATTER OF PROPOSED ACQUISITION OF SHARES AND VOTING RIGHTS IN – TARGET COMPANY TAJ GVK HOTELS AND RESORTS LIMITED 1. BLUE MOON TRUST PROPOSED ACQUIRER 2. MOONSHOT TRUST 3. STARLIGHT TRUST

BACKGROUND 1. Taj GVK Hotels And Resorts Limited (for convenience “Target Company”) is a company incorporated on February 02, 1995 and existing under the provisions of Companies Act, 2013. It has its registered office at Taj Krishna, Road Number 1, Banjara Hills, Hyderabad, Telangana – 500 034. The equity shares of the Target Company are listed on the BSE Ltd. (“BSE”) and National Stock Exchange of India Ltd. (“NSE”). 2. An Application dated April 24, 2023 (for convenience referred to as “Application”) seeking exemption from the applicability of regulation 3(1) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (for convenience “Takeover Regulations, 2011”) in the matter of proposed direct acquisition of shares in the Target Company was received from Blue Moon Trust (“Acquirer Trust 1”), Moonshot Trust (“Acquirer Trust 2”) and Starlight Trust (“Acquirer Trust 3”) (collectively referred to as “Acquirer Trusts / Proposed Acquirers / Applicants”).

Exemption Order in the matter of Taj GVK Hotels And Resorts Limited

3. Acquirer Trusts vide their Application have submitted the following: (a) The issued, subscribed and paid up Equity Share Capital of the Target Company is INR 12,54,02,990/- divided into 6,27,01,495 equity shares of INR 2/- each. The Target Company has a public shareholding of 25.01% and the non-public shareholding of 74.99% is entirely held by the promoters and the promoter group. As on the date of Application, the shareholding pattern of Target Company is as follows: Percentage of S. No. Name of shareholder Shareholding (%) 1. Mrs. Gunupati Indira Krishna Reddy 49.46 2. Mrs. Shalini Bhupal 0.01 3. Mr. GVK Reddy - 4. Mr. Krishna R Bhupal - 5. The Indian Hotels Company Limited 25.52 Total Promoters’ Shareholding 74.99 6 Public Shareholding 25.01 Total Shareholding 100.00 (b) The Acquirer Trusts have been set up as private family trusts inter alia for providing a suitable succession planning between the members of the Mrs. Gunupati Indira Krishna Reddy family. (c) Settlor of the Acquirer Trusts i.e. Mrs. Gunupati Indira Krishna Reddy proposes to transfer 3,10,02,806 (49.44%) shares of the Target Company, held by her, by way of gift to the Acquirer Trust 1 (43,89,105 shares – 7.00%), Acquirer Trust 2 (1,17,19,430 shares – 18.69%) and Acquirer Trust 3 (1,48,94,271 shares – 23.75%). The Trustees and beneficiaries of the Acquirer Trusts are the family members of the Settlor. The transaction is portrayed as below:

Blue Moon Trust (7.00%) Gunupati Indira Moonshot Trust Krishna Reddy (18.69%) (49.44%) Starlight Trust (23.75%)

(d) The transferor i.e. Mrs. Gunupati Indira Krishna Reddy is part of the ‘Promoter and Promoter Group’ of the Target Company and holds a total of 49.46% equity shares in the Target Company. Under the proposed acquisition, she intends to transfer a total of 49.44% of her shareholding in the Target Company, held by her, in the Target Company to the three Acquirer Trusts. (e) The aforesaid transaction trigger regulation 3(1) of the Takeover Regulations, 2011. (f) The Settlors, Trustees and beneficiaries of the aforementioned Acquirer Trusts are as under: Blue Moon Trust (Acquirer Trust 1) Status Name Relationship Mrs. Gunupati Indira Mother of Mrs. Shalini Bhupal and Settlor Krishna Reddy Grandmother of Mrs. Shriya Bhupal Trustees Mrs. Shalini Bhupal Mrs. Shalini Bhupal is daughter of Mrs. Gunupati Indira Krishna Reddy 1. Mrs. Shalini Bhupal and Mother of Mrs. Shriya Bhupal 2. Mrs. Shriya Bhupal Daughter of Mrs. Shalini Bhupal Beneficiaries 3. Children of Mrs. Lineal descendants of Mrs. Shriya Shriya Bhupal Bhupal 4. Spouse of Mrs. Shriya Spouse of Mrs. Shriya Bhupal Bhupal

Moonshot Trust (Acquirer Trust 2) Status Name Relationship Mother of Mrs. Shalini Bhupal and Mrs. Gunupati Indira Settlor Grandmother of Mr. Krishna R Krishna Reddy Bhupal 1. Mrs. Shalini Bhupal Mrs. Shalini Bhupal is daughter of Trustees 2. Mr. Krishna R Bhupal Mrs. Gunupati Indira Krishna Reddy and Mother of Mr. Krishna R Bhupal 1. Mrs. Shalini Bhupal 2. Mr. Krishna R Bhupal Son of Mrs. Shalini Bhupal 3. Spouse of Mr. Krishna Beneficiaries Spouse R Bhupal 4. Children of Mr. Lineal descendants of Mr. Krishna R Krishna R Bhupal Bhupal

Starlight Trust (Acquirer Trust 3) Status Name Relationship Mother of Mrs. Shalini Bhupal and Mrs. Gunupati Indira Settlor Grandmother of Mr. Krishna R Krishna Reddy Bhupal Trustees Mrs. Shalini Bhupal Mrs. Shalini Bhupal is daughter of Mrs. Gunupati Indira Krishna Reddy 1. Mrs. Shalini Bhupal and Mother of Mr. Krishna R Bhupal 2. Mr. Krishna R Bhupal Son of Mrs. Shalini Bhupal Beneficiaries 3. Spouse of Mr. Krishna Spouse R Bhupal 4. Children of Mr. Lineal descendants of Mr. Krishna R Krishna R Bhupal Bhupal 4. Further, vide Application, the Applicants have inter-alia provided following grounds for seeking exemption: (a) The Acquirer Trusts are private family trust set up inter alia for the purposes of providing a suitable succession planning structure for ensuring seamless intergenerational transfer of the trust funds amongst the family members who have been identified as Beneficiaries. (b) The proposed transfer is only in the nature of inter-se transfer of shares within the promoter / promoter group, with no change in overall promoter / promoter group shareholding in Target Company. (c) The Trust Deed of the Acquirer Trusts inter-alia provides that the trustees of the Acquirer Trusts shall only be individuals and immediate relatives or lineal descendants of the Trustees and/or Beneficiaries. (d) The proposed acquisition would neither result in any increase or decrease in the shareholding of the promoter group, nor would it result in change in control and management of the Target Company.

(e) The proposed acquisition is only a part of the internal re-alignment of holding within the family of Mrs. Gunupati Indira Krishna Reddy and is non-commercial in nature. (f) The proposed acquisition is intended to streamline succession and welfare of the members of the Mrs. Gunupati Indira Krishna Reddy family. Moreover, the members of the Mrs. Gunupati Indira Krishna Reddy family are the only beneficiaries of the Acquirer Trusts. (g) The proposed acquisition would not have any adverse impact on the Target Company or the wider securities market in India and is not expected to cause any appreciable adverse effect on the price of the shares of the Target Company. CONSIDERATION 5. Before I proceed with my consideration, I find it appropriate to quote the relevant regulatory provisions of Takeover Regulations, 2011, for facility of reference: “Substantial acquisition of shares or voting rights. 3(1). No acquirer shall acquire shares or voting rights in a target company which taken together with shares or voting rights, if any, held by him and by persons acting in concert with him in such target company, entitle them to exercise twenty-five per cent or more of the voting rights in such target company unless the acquirer makes a public announcement of an open offer for acquiring shares of such target company in accordance with these regulations.” 6. I have considered the Application submitted by the Acquirer Trusts and other material available on record. Without reiterating the facts as stated above, the following is noted: (a) The Application submitted is in respect of the proposed direct acquisition of shares and voting rights in the Target Company i.e. Taj GVK Hotels And Resorts Limited. The proposed acquisition as detailed above, which is to be undertaken by the Acquirer Trusts, will attract the provisions of regulation 3(1) of the Takeover Regulations, 2011. (b) Pursuant to the proposed acquisition, the Acquirer Trusts would collectively hold 49.44% shares in the Target Company as currently being held by the transferor, who is part of the promoter and promoter group of the Target Company.

(c) The proposed acquisition is intended to streamline succession and promote welfare of the Mrs. Gunupati Indira Krishna Reddy Family. The proposed direct acquisition would be a non-commercial transaction which would not affect or prejudice the interests of the public shareholders of the Target Company in any manner. (d) There will be no change in control of the Target Company pursuant to the proposed acquisition. (e) The pre–acquisition and post–acquisition shareholding of the promoter and promoter group in the Target Company will remain the same. The shareholding pattern is produced below for reference: Shareholding before Proposed After the proposed the proposed transaction acquisition acquisition Particulars % No. of % No. of No. of % holdin shares holding shares shares holding g Promoters & Promoter group other than Acquirer(s) Mrs. Gunupati Indira 3,10,12,806 49.46 - - 10,000 0.02 Krishna Reddy Mrs. Shalini 5,000 0.01 - - 5,000 0.01 Bhupal Mr. GVK - - - - - - Reddy Mr. Krishna - - - - - - R Bhupal The Indian Hotels 1,60,00,400 25.52 - - 1,60,00,400 25.52 Company Limited Acquirers and PAC Blue Moon - - 43,89,105 7.00 43,89,105 7.00 Trust Moonshot - - 1,17,19,430 18.69 1,17,19,430 18.69 Trust Starlight - - 1,48,94,271 23.75 1,48,94,271 23.75 Trust Public

Public 1,56,83,289 25.01 - - 1,56,83,289 25.01 Shareholding Total 6,27,01,495 100.00 3,10,02,806 49.44 6,27,01,495 100.00 (f) The shareholding pattern of the promoter group before and after the proposed acquisition by the Acquirer Trusts, as mentioned in the Application, is given below:

Shareholding pattern Shareholding pattern Mrs. G In dira K Reddy - 49.46% Mrs. G Indira K Reddy - 0.02% Relatives of Mrs. G Indira K Reddy - 0.01% Relatives of Mrs. G Indira K Reddy - 0.01% Other Promoter - 25.52% Blue Moon Trust (PAC) - 7.00% Total Pro moters Holding (A) - 74.99% Moonshot Trust (PAC) - 18.69% Non-Promoters (B) - 25.01% Starlight Trust (PAC) - 23.75% Total (A+B) - 100.00% Other Promoter - 25.52% Total Promoters & PACs Holding(A) - 74.99% Non-Promoters (B) - 25.01% Total (A+B) - 100.00% (g) The shareholding of other promoter in the Target Company (without the shareholding of Mrs. G Indira K RedOdthyer) Priosm o2t5er. 5 3 %. A s s t a t e d- 2 5a.5b2%o ve, the Total Promoter Holding - 74.99% Non-promoters - 25.01% Total - 100.00% shareholding of the Acquirer Trusts together with persons in the promoter group (who are PACs) except Mrs. G Indira K Reddy, would increase from 25.53% to 74.97%. This increase is beyond the threshold limit (of 25%) mentioned under regulation 3(1) of the Takeover Regulations, 2011. Further, prior to the transaction, since the acquirers do not hold any shares in the Target Company, no disclosure of their shareholding was made.

Hence, automatic exemption available under regulation 10(1)(a)(ii) i.e. inter-se transfer amongst persons named as promoters in the shareholding pattern filed by the target company for not less than three years prior to the proposed acquisition and 10 (1) (a) (iv) i.e. inter-se transfer amongst persons acting in concert disclosed for not less than three years prior to the proposed acquisition, were not available to the Acquirer Trusts and hence the Application has been filed for seeking exemption for the proposed transaction. (h) There will also be no change in the public shareholding of the Target Company. (i) The Target Company shall continue to be in compliance with the Minimum Public Shareholding requirements under the Securities Contracts Regulation Rules, 1957 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. 7. The Acquirer Trusts, vide the Application have confirmed compliance with the following Guidelines outlined in the Schedule to the SEBI Circular dated December 22, 2017: (a) The Trust is in substance, only a mirror image of the promoters’ holdings and consequently, there is no change of ownership or control of the shares or voting rights in the target company.

(b) Only individual promoters or their immediate relatives or lineal descendants are Trustees and beneficiaries of the Trust. (c) The beneficial interest of the beneficiaries of the Trust has not been and will not in the future, be transferred, assigned or encumbered in any manner including by way of pledge / mortgage. (d) In case of dissolution of the Trust, the assets will be distributed only to the beneficiaries of the trust or to their legal heirs;

(e) The Trustees will not be entitled to transfer or delegate any of their powers to any person other than one or more of themselves. (f) Any change in the trustees / beneficiaries and any change in ownership or control of shares or voting rights held by the Trust shall be disclosed within 2 days to the concerned stock exchanges with a copy endorsed to SEBI for its record. (g) As far as the provisions of the SEBI Act, 1992 and the regulations framed thereunder are concerned, the ownership or control of shares or voting rights will be treated as vesting not only with the Trustees but also indirectly with the beneficiaries. (h) The liabilities and obligations of individual transferors under the SEBI Act, 1992 and the regulations framed thereunder will not change or get diluted due to transfers to the Trust. (i) The Trust shall confirm, on an annual basis, that they are in compliance with the exemption order passed by SEBI. The said confirmation shall be furnished to the company which it shall disclose prominently as a note to the shareholding pattern filed for the quarter ending March 31 each year, under regulation 31 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. (j) The Trust shall get their compliance status certified from an independent auditor annually and furnish the certificate to the Stock Exchanges for public disclosure with a copy endorsed to SEBI for its records. (k) The proposed acquisition is in accordance with the provisions of the Companies Act, 2013 and other applicable laws. (l) The transferors are disclosed as promoters in the shareholding pattern filed with the Stock Exchanges for a period of at least 3 years prior to the proposed acquisition. (m) There is no layering in terms of trustees / beneficiaries in case of the Trust.

(n) The Trust Deed Agreement does not contain any limitation of liability of the trustees / beneficiaries in relation to the provisions of the SEBI Act, 1992 and all regulations framed thereunder. 8. Considering the aforementioned, I am of the view that exemption as sought for in the Application (read with further submissions) may be granted to the Proposed Acquirers, subject to certain conditions as ordered herein below. ORDER 9. I, in exercise of the powers conferred upon me under Section 19 read with Section 11(1) and Section 11(2)(h) of the SEBI Act, 1992 and regulation 11(5) of the Takeover Regulations, 2011, hereby grant exemption to the Proposed Acquirers, viz. Blue Moon Trust, Moonshot Trust and Starlight Trust from complying with the requirements of regulation 3(1) of the Takeover Regulations, 2011 with respect to the proposed direct acquisition in the Target Company, viz. Taj GVK Hotels And Resorts Limited, by way of proposed transaction as mentioned in the Application. 10. The exemption so granted is subject to the following conditions: (a) The proposed acquisitions shall be in accordance with the relevant provisions of the Companies Act, 2013 and other applicable laws.

(b) On completion of the proposed acquisition, the Proposed Acquirers shall file a report with SEBI within a period of 21 days from the date of such acquisition, as provided in the Takeover Regulations, 2011. (c) The statements / averments made or facts and figures mentioned in the Application by the Proposed Acquirers are true and correct. (d) The Proposed Acquirers shall ensure compliance with the statements, disclosures and undertakings made in the Application. The Proposed Acquirers shall also ensure compliance with the provisions of the SEBI Circular dated December 22, 2017. (e) The Proposed Acquirers shall also ensure that the covenants in the Trust Deeds are not contrary to the above conditions and undertaking provided by the transferor. In such case, the Trust Deeds shall be suitably modified and expeditiously reported to SEBI. 11. The exemption granted above is limited to the requirements of making open offer under the Takeover Regulations, 2011 and shall not be construed as exemption from the disclosure requirements under Chapter V of the aforesaid Regulations; compliance with the SEBI (Prohibition of Insider Trading) Regulations, 2015, Listing Agreement / SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 or any other applicable Acts, Rules and Regulations.

12. The exemption granted in this Order (at paragraph 9) from making an open offer in respect of the Proposed Acquisition shall remain valid for a period of 1 year from the date of this Order and the Applicants shall complete the implementation of the Proposed Acquisition within such period, failing which the granted exemption shall lapse and cease to exist. 13. The Application dated April 24, 2023 filed by Blue Moon Trust, Moonshot Trust and Starlight Trust, is accordingly disposed of. -Sd- Place: Mumbai ASHWANI BHATIA Date: July 26, 2023 WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA