NCLT Mumbai Clears First Motion For L&T Realty Business Demerger Into Wholly Owned Subsidiary

The Mumbai Bench of the National Company Law Tribunal (NCLT) has allowed a first-motion application in the proposed demerger of Larsen & Toubro Ltd's (L&T) realty business into its wholly owned subsidiary, L&T Realty Properties Ltd.

The tribunal also directed the convening of a meeting of L&T's equity shareholders to consider the scheme.

A bench of Judicial Member Lakshmi Gurung and Technical Member Hariharan Neelakanta Iyer passed the order

The scheme proposes the transfer and vesting of L&T's Realty Undertaking into L&T Realty Properties on a going-concern slump-sale basis. The undertaking includes assets, liabilities, contracts, and employees pertaining to the realty business. The appointed date for the scheme is April 1, 2026.

The boards of both companies approved the scheme on December 8, 2025. According to L&T, the restructuring is intended to create a focused management structure for the realty business. It is also aimed at improving efficiency, enabling sector-specific fundraising opportunities and enhancing value creation for stakeholders while continuing to benefit from the L&T brand and institutional strengths.

As consideration for the transfer, L&T Realty Properties will issue 393.53 crore fully paid-up equity shares of ₹10 each to Larsen & Toubro Ltd. The shares will be issued at a premium of ₹6 per share.

The Tribunal directed L&T to convene a meeting of its 17.31 lakh equity shareholders within 60 days. The shareholders will consider and, if thought fit, approve the scheme.

Meetings of L&T Realty Properties' equity shareholders and unsecured creditors were dispensed with. No meeting of its secured creditors was required, as the company had no secured creditors.

Allowing the first-motion application, the Tribunal also directed issuance of notices to the Regional Director, Registrar of Companies, Income Tax Department, and GST authorities. Notices will also be sent to the Reserve Bank of India, Securities and Exchange Board of India, National Stock Exchange, BSE, the concerned Real Estate Regulatory Authority, and other relevant sectoral regulators.

The regulatory authorities have been granted 30 days from receipt of the notice to submit representations, if any, on the proposed demerger.