NCLT Allows Scheme of Arrangement Between Palco Metals and Palco Recycle Industries

NCLT Allows Scheme of Arrangement Between Palco Metals and Palco Recycle Industries​

The National Company Law Tribunal (NCLT), Ahmedabad Bench, has issued orders allowing the First Motion Application concerning the proposed Scheme of Arrangement between Palco Metals Limited (the Transferee Company) and Palco Recycle Industries Limited (the Transferor Company). The order was pronounced on June 16, 2026.

Under the directions issued by the Tribunal in connection with this scheme, companies are required to convene specific meetings for their various stakeholders. For Palco Metals Ltd, the NCLT directed that a meeting of its equity shareholders be held within 45 days from the date of the order. The Transferee Company is also instructed to hold a meeting of its unsecured creditors and has no secured creditors, hence no such meeting is required for them.

For Palco Recycle Industries Limited, the Tribunal directed the convening of meetings for both its secured and unsecured creditors within 45 days of the order's issue. Furthermore, the Transferee Company must hold a meeting of its unsecured creditors as well. In all cases, the filing of the meeting report with the Tribunal is required within seven days of the meeting.

Financial Snapshot of Applicant Companies​

The scheme involves amalgamating the Transferor Company into the Transferee Company. Details regarding the share capital and stakeholder counts prior to the filing of the scheme include:

Rationale for Amalgamation​

The Board of Directors of both companies submitted that the amalgamation is intended to provide several benefits, including:

• Streamlining the corporate structure and consolidating assets and liabilities from the Transferor Company within the Transferee Company.
• Availing easier financial support opportunities for the Transferor Company's businesses.
• Achieving more efficient utilization of capital for enhanced development and growth of the consolidated entity.
• Maximizing shareholder value and improving management oversight.
• Realizing cost savings through legal entity rationalization, including the elimination of duplicate expenses.

The scheme was filed on November 22, 2025, with the appointed date agreed upon by the boards being April 1, 2025. The Tribunal also noted that the Transferor Company is a Wholly Owned Subsidiary of the Transferee Company and therefore, no valuation report was required.

The proposed Scheme of Arrangement remains subject to receiving requisite approvals from shareholders and creditors, followed by sanction from the NCLT and other applicable regulatory authorities.

Stock Price Movement​

As of 11:26, Palco Metals Ltd is ticking lower after shares drop by 1.13% or ₹1.60 to trade at ₹140.00. The stock traded within a defined intraday range, having touched a low of ₹138.15 while the high registered at ₹146.00.