NCLT Allahabad Sanctions India Glycols' Demerger Of Biopharma, Spirits & Biofuel Businesses

“The Scheme of Arrangement appears to be in conformity with the provisions of Sections 230 to 232 and other applicable provisions of the Companies Act, 2013, and does not appear to be contrary to law or public policy. No surviving objection remains for consideration before this Tribunal. In view of the above, and being satisfied that all the requisite statutory compliances have been duly fulfilled, this Tribunal hereby sanctions the Scheme of Arrangement...”

India Glycols Limited, a publicly listed company, sought to reorganise its business by transferring two distinct undertakings to separate resulting companies. Ennature Bio Pharma Limited was designated to receive the Biopharma undertaking, while IGL Spirits Limited was to take over the Spirits and Biofuel undertaking.

The first motion petition was filed in 2025, where the NCLT directed meetings of equity shareholders and unsecured creditors of the demerged company and dispensed with the requirement of convening meetings of equity shareholders of the Resulting Companies. The Chairperson's report confirmed unanimous approval by shareholders and overwhelming support from creditors.

In compliance with statutory requirements, notices were issued to the Regional Director (Northern Region), Registrar of Companies, Securities and Exchange Board of India (SEBI), NSE, BSE, and the Income Tax Department.

The Registrar of Companies reported no pending prosecutions or inquiries against the petitioner companies. The Regional Director emphasised that the resulting companies must undertake to discharge liabilities of the demerged undertakings under Section 240 of the Companies Act, and that sanctioning of the scheme would not absolve them of statutory obligations.

The Income Tax Department raised concerns about a small outstanding demand of Rs 27,890 against India Glycols for AY 2024‑25 and sought undertakings to ensure future tax liabilities are honoured.

All three companies filed affidavits undertaking to comply with tax laws, cooperate with authorities, and discharge liabilities of the respective undertakings. Further, NSE and BSE had already issued no‑objection letters after clearance from SEBI.

It was also submitted that the scheme does not provide for any corporate debt restructuring or any reduction in the paid-up equity share capital of the demerged company and that existing shares of the Resulting Companies held by the Demerged Company will stand cancelled upon the scheme becoming effective.

The companies further pointed out that no proceedings for winding up or any proceedings under the provisions of the IBC were pending against them.

The bench observed that all statutory objections had been addressed and undertakings furnished and the scheme was found to conform with law and public policy. Accordingly, the bench sanctioned the scheme.

For Applicants: Senior Advocate Rahul Agarwal