NCLT Mumbai Approves NSE Academy's ₹241.32 Crore Preference Share Capital Reduction

The Mumbai Bench of the National Company Law Tribunal (NCLT) has recently approved NSE Academy Limited's proposal to reduce up to ₹241.32 crore of its paid-up preference share capital.

The company had proposed the reduction after selling its investments in TalentSprint India Private Limited and TalentSprint Inc., stating that it held surplus cash and liquid investments following the transaction.

A bench of Judicial Member Ashish Kalia and Technical Member Sanjiv Dutt allowed the company's petition. It confirmed the proposed reduction of share capital after considering the company's responses to observations raised by the Regional Director and Registrar of Companies.

“From perusal of the materials available on record the Scheme appears to be fair and reasonable and is not violating any provisions of law and is not contrary to public policy. In view of the aforesaid, this bench is of the considered view that reduction of share capital is just and equitable in terms of Section 66 of the Act and neither violated any provisions of law nor is contrary to public policy. Therefore, the proposed reduction of share capital as above is hereby confirmed,” the tribunal held.

NSE Academy Limited was incorporated in March 2016. It provides financial education and training services, including certification programmes across financial market domains.

The company's board approved the capital reduction proposal on June 7, 2025. Shareholders subsequently approved it through special resolutions passed at the annual general meeting and extraordinary general meeting held on July 3, 2025.

According to the company, it had raised preference share capital to fund business operations and investments in TalentSprint India Private Limited and TalentSprint Inc. In April 2025, it transferred its entire investment in those entities for about ₹245.36 crore.

The company informed the Tribunal that it held surplus cash and liquid investments after the transaction. At the same time, it did not have sufficient reserves to redeem the preference shares.

It also stated that it had no immediate plans to deploy the excess cash for business operations or fresh investments. The company therefore proposed a reduction of preference share capital to enable repatriation of funds in excess of its requirements.

During the proceedings, the Regional Director raised questions regarding the company's financial position. The office also questioned whether provisions relating to the redemption of preference shares were attracted.

NSE Academy responded that the petition concerned a reduction of share capital and not redemption of preference shares. It relied on judicial precedents, including the Bombay High Court's decision in Birla Global Finance Ltd., to contend that reduction of share capital and redemption of preference shares are separate statutory mechanisms.

After considering the company's explanations and undertakings, the tribunal recorded that the observations of the Regional Director and the Registrar of Companies had been satisfactorily addressed.

The Tribunal also directed NSE Academy to publish notice of registration of the order and approved minutes in the Free Press Journal and Loksatta. The publication must be made within 30 days of registration by the Registrar of Companies.

The company has further been directed to file a certified copy of the order and the approved minutes with the Registrar of Companies within 30 days of receiving the certified order. An extended period may be permitted on payment of applicable additional fees.