NCLT Mumbai Approves Piramal Fund’s ₹200-Crore Securities Premium Set-Off to Erase Accumulated Losses
Pranav B Prem
The National Company Law Tribunal (NCLT), Mumbai Bench, has approved Piramal Fund Management Pvt. Ltd.’s proposal to utilise ₹200 crore from its Securities Premium Account to set off accumulated losses, thereby granting sanction to the company’s capital reduction scheme under Sections 66 and 52 of the Companies Act, 2013. The order was passed by a Bench comprising Judicial Member K.R. Saji Kumar and Technical Member Anil Raj Chellan.
Piramal Fund Management Pvt. Ltd., incorporated in 2005 and engaged in investment advisory services for the real estate sector, approached the Tribunal seeking approval to adjust its negative profit-and-loss balance as on 1 April 2025 by utilising amounts standing in the Securities Premium Account. The company submitted that accumulated losses had eroded the value represented by its share capital and securities premium, and the proposed accounting adjustment would provide a fair and realistic representation of its ‘Other Equity’ in the balance sheet. It further clarified that the reduction would not result in any payment to shareholders and would not affect the net worth of the company.
During the proceedings, the company informed the Tribunal that it had no secured creditors and only one unsecured creditor with an outstanding amount of ₹1.35 lakh, and submitted proof of service of notices. The Regional Director, Western Region, stated that after considering the company’s responses, he had “no objection to the proposed scheme of reduction.” The Tribunal recorded that no objections were received from any stakeholder, nor was any averment in the petition controverted.
The company also relied upon a certificate issued by its statutory auditors confirming that the proposed accounting treatment was in conformity with generally accepted accounting principles in India. After considering the submissions and the statutory reports, the Tribunal approved the minutes of reduction, which permit the company to set off the negative balance of its Profit and Loss Account as on 1 April 2025 to the extent of ₹200 crore against the balance in the Securities Premium Account. The Bench observed that statutory authorities would remain at liberty to take action if any violation of law emerges in the future.
Granting approval to the capital reduction scheme, the NCLT directed Piramal Fund Management Pvt. Ltd. to file a certified copy of the order with the Registrar of Companies within 30 days and to publish the requisite notices in accordance with law.
Appearance
For Applicant: PCA Harsh C Ruparelia instructed by A R C H and Associates, Chartered Accountants
For the Regional Director: Mr. Tushar Wagh, Deputy Director, for the Regional Director, Mumbai.
Cause Title: Piramal Fund Management Private Limited
Case No: C.P.104/MB-IV/2025
Coram: Judicial Member K.R. Saji Kumar, Technical Member Anil Raj Chellan
