NCLT Mumbai Clears First Motion For HSBC InvestDirect Merger With 1% Share Capital Reduction
The Mumbai Bench of the National Company Law Tribunal (NCLT) on 13 October, allowed the first motion application filed by HSBC InvestDirect Sales & Marketing (India) Private Limited and HSBC InvestDirect (India) Private Limited for their proposed amalgamation and the reduction of the transferor company's share capital.
A Bench comprising Judicial Member K.R. Saji Kumar and Technical Member Anil Raj Chellan passed the order under Sections 230 to 232 read with Section 66 of the Companies Act, 2013.
The companies' boards approved the composite scheme on 18 June 2026, with an appointed date of 1 April 2026. HSBC InvestDirect Sales & Marketing discontinued its home loan product distribution business from 1 July 2012, while HSBC InvestDirect (India) primarily undertakes investment and financing activities.
The scheme aims to consolidate the companies' corporate structure, reduce administrative costs and simplify regulatory compliance.
Under the scheme, 1,000 equity shares held by HSBC InvestDirect Employees' Welfare Trust, representing 1% of the transferor company's equity, will be cancelled through a reduction of share capital. The trust will receive Rs. 283.90 per share. Following the reduction, the transferor company will become a wholly owned subsidiary of the transferee company before the amalgamation. The transferee company will not issue any fresh shares under the scheme.
As of 31 March 2026, the transferor company had a paid-up share capital of Rs. 10 lakh and a net worth of Rs. 2.83 crore. The transferee company had a paid-up share capital of Rs. 70.95 crore and a net worth of Rs. 570.56 crore. Its net worth is projected to increase to Rs. 573.21 crore after the scheme.
The Bench dispensed with shareholder meetings after receiving consent affidavits from all shareholders. It also waived creditor meetings, noting that the companies had no secured creditors and had undertaken to protect the interests of unsecured creditors.
The companies must notify their unsecured creditors, serve the scheme on the relevant regulatory authorities, and file an affidavit confirming service and compliance within 10 working days of service.
Accordingly, the NCLT allowed the first motion application, subject to compliance with its directions.
For the Applicants : PCA Harsh C. Ruparelia, PCA i/b A R C H & Associates