Shyam Metalics and Energy Limited announced that its subsidiary, Shyam Sel and Power Limited, has received sanction from the National Company Law Tribunal (NCLT) for its merger with Shree Venkateshwara Electrocast Private Limited. The merger is effective retroactively from April 1, 2024. This strategic amalgamation is expected to consolidate aluminium foil operations, enhance operational efficiencies, and unlock significant financial synergies, including substantial tax benefits.
NCLT Approves Strategic Merger for Shyam Metalics Subsidiary
Shyam Metalics and Energy Limited has announced a significant development in its corporate structure, with its wholly-owned subsidiary, Shyam Sel and Power Limited (SSPL), securing sanction from the Hon’ble National Company Law Tribunal (NCLT), Kolkata Bench. The approval is for the Scheme of Amalgamation of Shree Venkateshwara Electrocast Private Limited (SVEPL) into and with SSPL. This merger is deemed effective retroactively from the Appointed Date of April 01, 2024.
Consolidation and Synergies
The merger aims to consolidate the Group’s growing aluminium foil product portfolio under a single corporate umbrella. This strategic move is anticipated to rationalize and centralize operations, leading to improved operational efficiencies, enhanced supply chain coordination, and a more seamless market reach. As SVEPL was already a 100% subsidiary, no new equity shares will be issued, and SVEPL’s existing share capital will be cancelled upon implementation. The merged entity, SSPL, will maintain a robust balance sheet with all assets, liabilities, contracts, and workforce of SVEPL vesting into it.
Financial Benefits and Tax Efficiency
A key outcome of this amalgamation is the realization of significant financial synergies, particularly through tax efficiency. Under Section 72A of the Income-tax Act, 1961, SSPL will be able to absorb and set off the accumulated carried-forward business losses and unabsorbed depreciation of SVEPL. This creates a comprehensive eligible tax shield for the combined entity, yielding substantial direct net tax benefits and immediate cash-flow savings. The Income Tax Department has already issued its No Objection Certificate (NOC) for the Scheme on May 15, 2026.
Management Commentary
Mr. Brij Bhushan Agarwal, Chairman & Managing Director of Shyam Metalics and Energy Limited, commented on the development: “The Hon’ble NCLT approval for the consolidation… marks a significant operational step forward. By unifying our manufacturing and marketing setup for value-added products like aluminium foil, we drive operational flexibility, eliminate redundant administrative layers, and optimize working capital. Additionally, the statutory set-off of accumulated losses provides a substantial immediate tax savings, directly adding value to our earnings and cash flows.”
About Shyam Metalics and Energy Limited
Shyam Metalics is a leading integrated metal-producing company in India, with a strong presence in the steel industry across West Bengal, Odisha, Jharkhand, and Madhya Pradesh. The company focuses on Long & Flat Steel Products, Ferro Alloys, Aluminium, and Stainless Steel. It was listed on the exchanges in 2021 and boasts a market capitalization exceeding ₹33,000 Cr. With an aggregate installed metal capacity of 16.93 MTPA and 467 MW of captive power, the company is a significant player in the Indian metals sector.
Source: BSE
