NCLT Sanctions Scheme of Amalgamation between India Radiators Limited and Mercantile Ventures Ltd

NCLT Sanctions Scheme of Amalgamation between India Radiators Limited and Mercantile Ventures Ltd​

The National Company Law Tribunal (NCLT), Division Bench at Chennai, has sanctioned the Scheme of Amalgamation involving India Radiators Limited (the Transferor Company) and Mercantile Ventures Limited (the Transferee Company). The order was pronounced by the Hon'ble NCLT on July 2, 2026.

The scheme consolidates both companies under the jurisdiction of the Tribunal, providing a structure intended to streamline operations and enhance market presence for the merged entity.

Scheme Details and Rationale​

The amalgamation is proposed under Sections 230 to 232 of the Companies Act, 2013. The Appointed Date specified in the scheme is January 1, 2025.

A primary rationale behind the merger includes substantial operational improvements for Mercantile Ventures Limited. The objectives cited by the companies include:

• Significantly reducing administrative and operational costs.
• Achieving economies of scale through centralization and eliminating work duplication.
• Enhancing overall business efficiency and utilizing combined managerial and operating strength.
• Strengthening, consolidating, and stabilizing the businesses to facilitate future expansion and growth.

Statutory Authorities Review​

Before the sanction, the Scheme was subjected to review by various statutory authorities, including the Regional Director (RD) of the Southern Region, the Income Tax Department, and the Official Liquidator. The companies served notices regarding the scheme to these regulatory bodies and stakeholders.

Key findings from the reviewing agencies include:

• Regional Director: The RD's report indicated 'Observations' but raised no objections to the Scheme.
• Income Tax Department: The department reported no objection to the proposed amalgamation, provided that all existing and future tax liabilities of the amalgamating company are borne by the amalgamated company in accordance with Section 170 of the Income Tax Act.
• Official Liquidator: The OL identified concerns regarding employee protection undertakings and the mutual fixing of a Record Date post-sanction.

Tribunal's Observations and Sanction​

After analyzing these reports and the detailed proposal, the Tribunal sanctioned the Scheme of Amalgamation, finding it beneficial to the companies and not detrimental to the interests of shareholders.

The Tribunal issued several directions and conditions as part of the sanctioning order:

• Transfer of Business: The entire business and undertaking of the Transferor Company shall be transferred to and vest in or be deemed to have been transferred and vested in the Transferee Company under the Companies Act, 2013.
• Asset and Liability Assumption: All assets and debts, liabilities, duties, and obligations of the Transferor Company must be transferred to and become the responsibilities of the Transferee Company.
• Employees: Employees of the Transferor Company who are in service from the Appointed Date shall continue as employees of the Transferee Company without any break or interruption in service.
• Conditional Approval: The Tribunal clarified that while approving the Scheme, no deficiency found or violation committed under statutory rules would negate action taken against concerned persons, directors, and officials of the petitioners.

The companies also undertook specific commitments regarding employee protection, the mutual fixing of the Record Date, and ensuring that no modification to the Scheme would be undertaken without prior Tribunal approval.

MERCANTILE Stock Price Movement​

As of 11:12 AM, shares of Mercantile Ventures Limited are rallying strongly, trading at ₹26.39 after increasing by 6.41% in the current session. The stock is currently confined between a low of ₹24.08 and a high of ₹26.45, with 734 shares changing hands during this live market activity.