NCLT Mumbai Allows First Motion in Alkem–Adroit Biomed Merger, Orders Shareholders' Meeting

On 10 June, the Mumbai Bench National Company Law Tribunal (NCLT), allowed the first motion application in the proposed merger of Adroit Biomed Limited with its parent company Alkem Laboratories Limited and directed Alkem to convene a shareholders' meeting to consider and approve the scheme.

Judicial Member K.R. Saji Kumar and Technical Member Anil Raj Chellan observed that Alkem acquired 100% of Adroit Biomed's equity share capital on 23 April 2025, thereby making it a wholly owned subsidiary.

The scheme proposes the merger of Adroit Biomed into Alkem as part of the company's strategy to strengthen its dermatology and cosmetology business and streamline its group structure.

The applicant companies contended that the Tribunal need not require a shareholders' meeting since the merger involves a wholly owned subsidiary, Alkem will not issue fresh shares, and the transaction will not dilute existing shareholding. They further submitted that the scheme would improve operational efficiencies, reduce compliance costs, consolidate resources, and enhance market presence.

The Tribunal, however, held that Alkem's shareholders had not received an opportunity to evaluate the implications of the acquisition and the subsequent merger. It also noted that the net worth certificates relied upon carried limited relevance in view of ongoing litigation involving the transferee company.

It rejected the request to dispense with the shareholders' meeting and held that shareholders must take the decision on the scheme rather than the Tribunal granting judicial dispensation.

Therefore, it directed Alkem to convene a shareholders' meeting within 70 days through video conferencing or other audio-visual means and appointed former NCLT Member Harihar Prakash Chaturvedi as Chairperson for the meeting.

It dispensed with meetings of secured creditors based on consent and directed that unsecured creditors be notified and given an opportunity to submit representations.

The Bench also directed the companies to issue notices of the scheme to regulatory authorities, including the Regional Director, Registrar of Companies, Income Tax Department, GST authorities, SEBI, BSE, NSE, and the Official Liquidator.