NCLT Chennai Approves TVS Investments–TVS Electronics Merger, Finds Scheme Beneficial To Shareholders
Pranav B Prem
The National Company Law Tribunal (NCLT), Chennai Bench has approved a scheme of amalgamation involving TVS group entities, permitting the merger of TVS Investments Private Limited with TVS Electronics Limited. The Tribunal found that the arrangement was prima facie beneficial to the companies and their shareholders, and that there was no basis to refuse sanction under Sections 230 to 232 of the Companies Act, 2013.
A Bench comprising Judicial Member Sanjiv Jain and Technical Member Venkatraman Subramaniam noted that the petitioners had complied with statutory requirements and produced all mandatory documents, including approvals from the stock exchanges and the shareholders. The Tribunal observed that the overwhelming majority of stakeholders supported the merger, and that the objections raised by the Regional Director and the Official Liquidator had been satisfactorily addressed.
The scheme provides for the amalgamation of TVS Investments into TVS Electronics with April 1, 2023 as the appointed date. As consideration, shareholders of TVS Investments will receive 1,11,60,093 fully paid-up equity shares of ₹10 each in TVS Electronics, proportionate to their existing holding. The Board of Directors of both companies approved the scheme on November 10 and 11, 2023. The BSE issued its approval on July 31, 2024, and the NSE on August 20, 2024. Following this, the first motion application was filed on January 7, 2025 and the second motion petition on April 13, 2025.
The petitioners contended that the amalgamation was intended to streamline the promoter shareholding structure, strengthen operational focus, reduce administrative and compliance burden, and reflect the promoter group’s direct commitment to TVS Electronics. It was also submitted that 99.24% of equity shareholders voted in favour of the proposal. The applicants further acknowledged the existence of an income tax demand of approximately ₹37 lakh against TVS Investments and assured that TVS Electronics would discharge the liability after amalgamation.
The Regional Director objected to the appointed date on the ground that it was antedated by more than one year, allegedly in violation of MCA Circular No. 09/2019. The Official Liquidator raised concerns regarding valuation, commercial substance, employee protection and the possibility of tax avoidance. The petitioners filed detailed replies addressing each objection, and the Income Tax Department confirmed in its report dated May 21, 2025 that it had no objection to the scheme.
Rejecting the Regional Director’s contention on the appointed date, the Tribunal held that the delay in stock exchange approvals justified the timeline selected by the companies. It observed that the boards had approved the scheme promptly and that obtaining approvals from BSE and NSE consumed time beyond their control. The Tribunal concluded that the antedating of the appointed date was reasonable and did not prejudice public interest.
Sanctioning the amalgamation, the Tribunal directed the companies to file a certified copy of the order and the scheme with the Registrar of Companies within thirty days. It further ordered that TVS Investments stand dissolved without winding up, and that TVS Electronics take all necessary steps to give effect to the merger. The approval marks a significant restructuring step within the TVS group, enabling consolidation of the promoter holding structure while aligning business operations under TVS Electronics.
Appearance
For Petitioner: T.K. Bhaskar, K. Harishankar, Niranjan S. Rao, Shakthivelan Manisekaran, Advocates
For Regional Director: Advocate Avinash Krishnan Ravi
For Official Liquidator: Pola Raghunathan
For Income Tax Department: Advocate Raj Jhabakh
Cause Title: TVS Investments Private Limited and TVS Electronics Limited
Case No: CP(CAA)/25(CHE)/2025 in CA(CAA)/7/CHE/2024
Coram: Judicial Member Sanjiv Jain, Technical Member Venkatraman Subramaniam
