ABFRL-TCNS merger gets NCLT approval: 5 key dates

What the NCLT approval means for ABFRL and TCNS

The National Company Law Tribunal (NCLT), Mumbai Bench has approved the merger of TCNS Clothing Co. with Aditya Birla Fashion and Retail (ABFRL). The approval is under a Scheme of Amalgamation by way of Merger by Absorption, which means TCNS will be merged into ABFRL under the sanctioned scheme. The order was pronounced on August 2, 2024. ABFRL said it received the certified true copy of the order on August 16.

This approval follows ABFRL’s majority stake acquisition in TCNS, a deal that was first announced in May 2023. ABFRL has already stated that it acquired control over TCNS after securing 51 percent of the expanded share capital. With the scheme now approved by the NCLT, the merger process moves from regulatory clearances towards implementation in line with the tribunal’s order.

The transaction that set the stage: ₹1,650 crore majority stake deal

ABFRL, a firm of the Aditya Birla Group, announced on May 5 that it would acquire a majority stake in TCNS Clothing in a deal valued at ₹1,650 crore. The same deal value is also described as 1,650 crore rupees (about $102 million). The acquisition structure included two steps: a Share Purchase Agreement (SPA) with the founding promoters, followed by an open offer.

ABFRL’s regulatory filings around the acquisition emphasised that the outcome was control of TCNS. After completion, ABFRL said TCNS became its subsidiary. It also said TCNS would be a material subsidiary in accordance with SEBI Listing Regulations.

How ABFRL acquired shares: SPA first, then open offer

Under the SPA, ABFRL acquired 1.41 crore equity shares. This represented 22 percent of the expanded share capital of TCNS, as stated in the disclosure. The next step was the conditional open offer and SPA closing.

ABFRL later said that, consequently, after the conditional open offer and SPA closing, it acquired 3.29 crore equity shares in total. This total holding constituted 51 percent of the expanded share capital of TCNS. ABFRL described this as acquiring control over TCNS, and therefore becoming a promoter of the women’s apparel brand.

Regulatory clearances: CCI, stock exchanges, and then NCLT

A series of approvals and no-objection confirmations preceded the NCLT order. The Competition Commission of India (CCI) approved the acquisition in June 2023. Separately, the merger scheme received a no-objection letter from both BSE Ltd and NSE Ltd in March 2024.

With these steps in place, the NCLT Mumbai Bench’s order dated August 2, 2024 represents the key corporate law approval for the merger by absorption. ABFRL confirmed it received the certified true copy on August 16.

Timeline: five dated milestones to track

Key numbers from the acquisition disclosures

ABFRL’s filings provide specific share counts and percentages tied to the “expanded share capital” of TCNS. The SPA portion and the post open offer total are both explicitly disclosed. The deal value is also consistently referenced as ₹1,650 crore.

Why the merger by absorption is a notable step

The acquisition in 2023 made ABFRL the controlling shareholder, but the NCLT-approved scheme is a separate corporate action that consolidates the relationship through a merger by absorption. In such schemes, the absorbed company is merged into the transferee company, subject to the terms of the scheme and approvals.

In this case, the NCLT’s approval follows a regulatory path that included competition clearance and stock exchange no-objections. The dates matter for investors tracking corporate actions, since they mark progression from acquisition announcement to control, and then to the merger order.

Market and compliance angles investors typically track

From ABFRL’s disclosures, one clear compliance point is that TCNS is described as a “material subsidiary” under SEBI Listing Regulations after the 51 percent acquisition. That status generally increases disclosure and governance attention for listed groups, since material subsidiaries can carry additional reporting expectations.

Another point is the structure used to acquire control: an SPA with founding promoters plus an open offer. The company has clearly reported the number of shares acquired at each stage and tied them to the expanded share capital, helping investors reconcile the move to 51 percent.

What comes next based on the filings and order status

The NCLT order has been pronounced and ABFRL has confirmed receipt of the certified true copy. The remaining steps, operationally, will be guided by the Scheme of Amalgamation as approved and the procedural requirements that follow from the tribunal order.

The sequence so far is clear: ABFRL announced the ₹1,650 crore deal in May 2023, received competition clearance in June 2023, became promoter by September 2023, obtained exchange no-objections in March 2024, and now has the NCLT approval order pronounced on August 2, 2024.