NCLT Mumbai Directs Piramal Finance Shareholder Vote On Merger Of Three Subsidiaries Into It

The Mumbai bench of the National Company Law Tribunal (NCLT) has cleared the first leg of a scheme to merge three Piramal group subsidiaries into Piramal Finance Limited.

However, it directed the listed NBFC to convene a meeting of its equity shareholders, saying they should be given an opportunity to consider the implications of the amalgamation after noting that the transferor companies appeared to have negative net worth.

A bench of Judicial Member Sushil Mahadeorao Kochey and Technical Member Anil Raj Chellan passed the order on April 30 on a first motion application. The application sought directions on meetings and notices in connection with the proposed amalgamation of Piramal Corporate Tower Private Limited, Piramal Agastya Offices Private Limited and DHFL Investments Limited with Piramal Finance Limited.

Piramal Finance is an RBI-registered non-deposit taking NBFC-ICC. Its equity shares and debentures are listed on the BSE and NSE, while its commercial papers are listed on the NSE. The boards of all four companies approved the scheme on March 27, 2026, with April 1, 2026 fixed as the appointed date.

The companies told the tribunal that the amalgamation would consolidate the operations and business of the transferor companies into Piramal Finance. They said the move would streamline the group structure, reduce compliance and administrative costs, improve operational efficiencies and strengthen Piramal Finance's balance sheet.

Since the three transferor companies are wholly owned subsidiaries of Piramal Finance, the scheme provides that no fresh shares will be issued as consideration. Instead, the share capital held by Piramal Finance in the transferor entities will stand cancelled and extinguished once the scheme becomes effective.

The companies argued that meetings of shareholders and creditors could be dispensed with because the scheme did not involve any compromise or arrangement between the applicant companies and their shareholders or creditors.

They said no new shares were being issued, there would be no dilution of shareholding, and debt obligations would continue unchanged in the amalgamated entity. According to the companies, the post-merger net worth of Piramal Finance would remain positive at ₹23,449.63 crore.

The tribunal accepted the request to dispense with shareholder meetings for the three transferor companies after noting that all shareholders had given consent affidavits. It also dispensed with meetings of secured and unsecured creditors of the relevant companies, while permitting creditors to submit representations within 30 days of receiving notice.

However, the tribunal declined to waive the equity shareholders' meeting of Piramal Finance.

“The word 'may' used in Section 232(1) of the Companies Act provides some discretion to the Tribunal to dispense with the meeting of shareholders and creditors. However, it is a settled position of law that the shareholders are to be considered on a different footing,” the bench said.

“It is observed that the net worth of the Transferor Companies appears to be negative, and the equity shareholders are the stakeholders who should take a view on the implications of the merger,” it added.

The tribunal directed Piramal Finance to convene the equity shareholders' meeting within 60 days of the order being uploaded. Former NCLT member (judicial) Kuldeep Kumar Kareer has been appointed chairperson for the meeting, while Nrupang Dholakia has been appointed scrutiniser. Notices must be issued at least 30 days in advance, including publication in Business Standard and Navshakti.

The tribunal also directed the companies to serve notices on regulatory authorities including the Regional Director, Registrar of Companies, Income Tax authorities, GST authorities, the Official Liquidator, RBI, SEBI, BSE, NSE, IRDAI, India International Exchange IFSC Ltd and other sectoral regulators.