NCLT Orders Directions for Scheme of Arrangement Between Digjam Limited and Reid & Taylor International Private Limited

NCLT Orders Directions for Scheme of Arrangement Between Digjam Limited and Reid & Taylor International Private Limited​

The National Company Law Tribunal (NCLT) granted directions regarding a proposed Scheme of Arrangement between Reid & Taylor International Private Limited and Digjam Limited, stating that the application filed under Section 230-232 of the Companies Act, 2013 was allowed. The order, pronounced by the NCLT Chennai Bench on June 19, 2026, pertains to the consolidation and reorganization of businesses within the textile sector.

The Tribunal's orders included admitting the joint application and issuing directions for convening necessary meetings and completing statutory formalities related to the Scheme. The directions mandated that the companies undertake specific procedural compliances, including the publication of required notices.

Rationale and Scope of the Scheme​

The proposed Scheme involves the demerger of Reid & Taylor International Private Limited (the Demerged Company) into Digjam Limited (the Resulting Company).

The rationale for this arrangement is centered on unifying the 'Textile Business' of both entities. The Boards of Directors from both companies recognized that combining these business divisions would enable the Resulting Company to optimize specialized skills, cash flow profiles, and operational needs. This integration aims to achieve economies of scale, cost savings, and streamline administrative expenses, ultimately positioning the combined entity as a fully integrated service provider in the textile sector. Furthermore, the Scheme is intended to lead to enhanced potential for increased revenues and profits over time for the Resulting Company and its members.

Stakeholder Composition and Financials​

The application detailed the structure of both companies as part of the arrangement. The Demerged Company (Reid & Taylor International Private Limited) had an authorized share capital of 1,00,00,000 Equity shares of Rs.10/- each. Its issued, subscribed, and paid-up capital stood at 1,15,000 Equity shares as of March 31, 2025. Subsequent changes resulted in an issuance of 1,53,400 Equity Shares totaling INR 15,34,000/- as of June 25, 2025.

The Resulting Company (Digjam Limited) held authorized share capital including 10,00,50,000 Equity shares of Rs.10/- each and 27,00,000 Cumulative Preference Shares of Rs.100/- each. As of March 31, 2024, the issued and paid-up capital included 2,00,00,000 Equity shares (valued at INR 20,00,00,000) and 27,00,00,000 in preference shares.

The allocation of stakeholders across both companies is summarized below:

NCLT Directives and Operational Meetings​

The Tribunal provided specific directions regarding the meetings of various stakeholders. Since consent by way of affidavits was obtained from all equity shareholders (100% for Demerged Company) and secured creditors (100% for Demerged Company), the necessity to hold meetings for these groups has been dispensed with. Similarly, the need for preference and unsecured creditor meetings in Digjam Limited was dispensed with, given that consent forming 95.08% had been obtained from Unsecured Creditors.

The NCLT directed the convening of specific meetings:

• Unsecured Creditors (Demerged Company): A meeting is directed to be held on August 16, 2026, at 10:00 A.M.
• Secured Creditors (Resulting Company): A meeting is directed to be convened on August 16, 2026, at 11:00 A.M.

The Tribunal also set specific quorum requirements for the meetings. For instance, the quorum for the Unsecured Creditors of the Demerged Company was fixed at 140, while the Equity Shareholders of the Resulting Company required a quorum of 6. The Chairperson appointed for the relevant meeting was assigned a fee of Rs.1,00,000/-.

DIGJAMLMTD Stock Price Movement​

Shares of Digjam Limited slipped by 0.02% on Thursday, concluding the session at ₹47. Total traded volume for the stock amounted to 29,029 shares.