NCLT Ahmedabad Sanctions Prima Plastics Demerger Of Rotational Moulding Business Into Subsidiary

The Ahmedabad Bench of the National Company Law Tribunal (NCLT) has recently sanctioned a Scheme of Arrangement providing for the demerger of the Rotational Moulding Business of Prima Plastics Limited into its wholly owned subsidiary, Prima Innovation Limited.

The order was passed by Judicial Member Shammi Khan and Technical Member Sanjeev Sharma on March 16, 2026.

The appointed date is July 1, 2024.

Prima Plastics Limited is listed on BSE Limited, while Prima Innovation Limited is its wholly owned subsidiary and is not listed on any recognised stock exchange.

The scheme provides for segregation of the Rotational Moulding (Roto) business from the remaining furniture and allied businesses of the demerged company, with the objective of enabling focused management, operational efficiency, and independent growth of the two business verticals.

The restructuring is intended to result in two separate listed entities, with the Resulting Company focusing on the Roto business and the Demerged Company continuing its furniture and allied operations.

The equity shareholders and unsecured creditors of Prima Plastics Limited approved the scheme with the requisite majority, with shareholders voting in favour by 99.99997 percent and unsecured creditors approving it unanimously.

Reports were received from the Regional Director, Registrar of Companies and the Income Tax Department. The Income Tax Department stated that no outstanding demand was found against the Resulting Company as per available records, while reserving liberty to act in accordance with law if required. No response was received from SEBI, BSE, NSE, or GST authorities.

After considering the material on record, the tribunal held that the scheme is fair, reasonable and not prejudicial to the interests of shareholders, creditors, or other stakeholders and sanctioned the Scheme of Arrangement, subject to the clarification that statutory authorities remain free to take action in accordance with law if any violation is found.