NCLT Clears First Motion Of Essar Group Plan To Shift 'Essar' Brand From Abhinand Ventures To Essar Power

The National Company Law Tribunal (NCLT) at Ahmedabad has cleared the first motion in a group restructuring exercise through which the Essar Group proposes to shift ownership of the “Essar” brand from one group company to another.

The scheme involves Essar Power Limited and its group company Abhinand Ventures Private Limited.

Abhinand Ventures presently holds the Essar brand, which the scheme proposes to transfer to Essar Power.

A bench of Judicial Member Shammi Khan and Technical Member Sanjeev Sharma allowed the first motion and directed that meetings of shareholders and creditors be convened to consider the scheme. Meetings of certain classes were dispensed with after written consent affidavits were placed on record.

Under the arrangement, Abhinand Ventures will demerge its Brand Undertaking into Essar Power. The undertaking comprises ownership of the “Essar” name and related group trademarks, including green and renewable energy marks. Abhinand Ventures, incorporated in 2016, currently holds around 150 registered Essar-related trademarks.

The scheme also includes a capital restructuring in Essar Power. As part of this, 50 crore Compulsorily Convertible Cumulative Preference Shares, with an aggregate face value of Rs 1,000 crore, held by Abhinand Ventures will be cancelled and converted into an unsecured loan of Rs 875 crore at fair value. The balance Rs 125 crore will be credited to Essar Power's capital reserve.

While examining the financial disclosures, the tribunal flagged an unusual entry of about Rs 1,799.79 crore shown under “0.01% cumulative redeemable preference shares.” The bench recorded that counsel consented to convening a meeting of Essar Power's unsecured creditors to clarify the classification.

Under the scheme, shareholders of Abhinand Ventures will receive 6.20 crore equity shares of Essar Power. The appointed date for the scheme is April 1, 2025.

The tribunal directed that meetings of specified shareholders and creditors of both companies be held on March 14, 2026, and appointed Saurabh Pandey as the independent chairperson to conduct the meetings. It clarified that the capital reduction forms an integral part of the scheme and does not require a separate sanction under Section 66 of the Companies Act, 2013.

For Applicant Companies: Senior Advocate Saurabh Soparkar with Advocates Raheel Patel and Yash Dadhich