NCLT Hyderabad Sanctions Amalgamation of Indu Projects Ltd with 10 Subsidiaries Under S. 230-232 of Companies Act - 2025-08-11

NCLT Hyderabad Approves Merger of Indu Projects with Ten Subsidiary Companies

Hyderabad, August 11, 2025 – The National Company Law Tribunal (NCLT), Hyderabad Bench, has sanctioned a major corporate restructuring involving Indu Projects Limited and ten of its subsidiary companies. The bench, comprising Hon’ble Member (Judicial) Shri. Rajeev Bhardwaj and Hon’ble Member (Technical) Shri. Sanjay Puri, approved the Scheme of Arrangement for the amalgamation of the ten transferor companies with Indu Projects Limited, the transferee company.

The order, pronounced on August 11, 2025, sets the appointed date for the merger as April 1, 2024. Upon the scheme becoming effective, all ten transferor companies will be dissolved without undergoing the formal winding-up process.

Overview of the Case

The joint petition was filed under Sections 230 to 232 of the Companies Act, 2013, seeking approval for a Scheme of Arrangement to merge the following ten transferor companies with Indu Projects Limited:

• VK Projects Private Limited
• Sindhura Properties Private Limited
• Astitva Realtors Private Limited
• Sundari Theme Ventures Private Limited
• IPL Infra Services Private Limited
• Asara Energy Ventures Private Limited
• Indu Mineral Exploration (India) Private Limited
• Kaviti Power Private Limited
• Kakatiya Longwall Project Private Limited
• Stellar Energy Technologies Private Limited

The petitioner companies, all registered in Telangana, operate in diverse sectors including real estate, infrastructure, energy, and mining. The judgment noted that nine of the transferor companies are wholly-owned subsidiaries of Indu Projects Limited, while the tenth, Kakatiya Longwall Project Pvt Ltd, is a step-down subsidiary.

Rationale and Arguments for Amalgamation

The primary rationale presented for the merger was to achieve a simplified corporate structure and operational synergy. The petitioners argued that the amalgamation would lead to:

• Consolidation of Business: Unifying operations to enable effective management, expand business activities, and maximize value for stakeholders.
• Administrative Efficiency: Creating economies of scale by reducing administrative and managerial costs, eliminating duplicated responsibilities, and lowering overheads related to accounting, compliance, and auditing.
• Protection of Interests: The scheme would not prejudice the interests of any shareholder or creditor, as the transferor companies are already fully owned subsidiaries of the transferee company.

Given that the transferor companies are wholly-owned subsidiaries, the scheme specified that their entire share capital would be automatically cancelled upon the merger becoming effective. Consequently, no new shares will be issued by Indu Projects Limited, and a share exchange ratio was deemed not applicable.

Regulatory Scrutiny and Undertakings

The scheme was subjected to review by several regulatory bodies, including the Regional Director (RD), the Official Liquidator (OL), and the Income Tax Department, who raised several observations. In response, Indu Projects Limited provided key undertakings, which the NCLT took on record:

• Employee Protection: The company undertook that there would be no retrenchment of employees from the transferor companies as a result of the merger.
• Statutory Fees: Indu Projects committed to paying the differential fee for the combined authorized share capital, in compliance with Section 232(3)(i) of the Companies Act, 2013.
• Tax Liabilities: The company affirmed that it would handle all tax implications arising from the amalgamation and settle any pending statutory dues of the transferor companies as and when they are determined by the authorities. This included addressing a significant demand from the Income Tax Department, which was subsequently nullified by a consequential order recognizing the approval of Indu Projects' resolution plan under the Insolvency and Bankruptcy Code, 2016.

The Court's Final Decision

After considering all submissions and the "no-objection" from the regulatory authorities post-clarifications, the NCLT sanctioned the Scheme of Arrangement. The Tribunal’s order included several key directives:

• The scheme shall be binding on all shareholders, creditors, employees, and other stakeholders of the involved companies.
• All assets, liabilities, and legal proceedings of the transferor companies shall stand transferred to Indu Projects Limited.
• The sanction does not grant any exemption from stamp duty, taxes, or other statutory payments.
• The transferor companies are to be dissolved without winding up.
• The companies must file a certified copy of the order with the Registrar of Companies within 30 days.

This judgment paves the way for the creation of a consolidated entity under Indu Projects Limited, aimed at streamlining operations and enhancing overall business efficiency.