Ashok Leyland holding to dilute to 59.64% in NDL Ventures

Ashok Leyland Limited’s holding is set to decline to 59.64% in NDL Ventures from 61.12% in Hinduja Leyland Finance under the proposed merger, a reduction of 1.48 percentage points. Eligible Hinduja Leyland Finance shareholders would receive 25 NDL Ventures shares for every 10 shares held, with April 1, 2026 set as the appointed date.

How will Ashok Leyland’s NDL Ventures holding change?

Ashok Leyland’s stated holding will fall by 1.48 percentage points, from 61.12% in Hinduja Leyland Finance to 59.64% in NDL Ventures after the merger takes effect. The filing describes a share issue to Hinduja Leyland Finance shareholders, rather than a sale of Ashok Leyland shares.

The merger consideration provides for 25 fully paid NDL Ventures equity shares, each with a face value of Rs 10, for every 10 fully paid Hinduja Leyland Finance equity shares of Rs 10 each. The shares will be issued to holders recorded in Hinduja Leyland Finance’s register of members on the record date, which has not been specified in the supplied filing.

The 25-for-10 exchange ratio equals 2.5 NDL Ventures shares for each Hinduja Leyland Finance share. The filing does not disclose Ashok Leyland’s share count, the number of New Equity Shares to be issued or NDL Ventures’ resulting equity capital, so its absolute post-merger shareholding cannot be calculated from this document.

What does the Hinduja Leyland Finance merger involve?

The scheme proposes a merger by absorption of Hinduja Leyland Finance into NDL Ventures, with Hinduja Leyland Finance as the transferor company and NDL Ventures as the transferee company. Both boards approved the scheme on November 25, 2025, and the appointed date under the arrangement is April 1, 2026.

NDL Ventures said it intends to conduct non-banking financial company, or NBFC, business and amended its memorandum of association to reflect that purpose. The filing describes Hinduja Leyland Finance as a leading NBFC and says the transaction is intended to provide NDL Ventures shareholders an opportunity to participate in the NBFC sector.

Management and the boards said the combination is intended to expand avenues for growth capital, improve capital-raising efficiency and provide access to business cash flow and external capital. They also cited lower duplication of administrative and regulatory functions, integrated use of resources and assets, and an increase in NDL Ventures’ net worth as expected benefits rather than reported outcomes.

The filing says Hinduja Leyland Finance’s board will stand dissolved when the merger takes effect, without prejudice to decisions and actions already taken by that board. It also states that the scheme is not expected to adversely affect directors, key managerial personnel, shareholders, creditors, other security holders or employees of either company.

Which approvals has the NDL Ventures merger received?

Shareholders of both companies approved the scheme at meetings held through video conferencing or other audio-visual means on July 30, 2026. Hinduja Leyland Finance shareholders present and voting approved it with 100% in value and number, while NDL Ventures shareholders approved it with 99.99% in value and 97.87% in number.

Hinduja Leyland Finance’s unsecured creditors also approved the scheme on July 30, 2026, with 99.99% of participating creditors supporting it through remote e-voting and e-voting. NDL Ventures’ unsecured-creditor meeting was dispensed with because its three unsecured creditors, owed Rs 8.77159 lakh in aggregate as of March 31, 2026, had been paid in the ordinary course of business and issued no-dues certificates.

The National Company Law Tribunal, Mumbai Bench-I, had directed the shareholder and creditor meetings on June 17, 2026. The Regional Director, Western Region, Mumbai, filed a report dated September 29, 2026, and its authorised representative said on October 1, 2026 that there was no objection if the scheme was considered for approval.

The companies stated that there were no pending investigations under the listed provisions of the Companies Act, 2013, and no Insolvency and Bankruptcy Code proceedings or litigation with a material impact on the scheme. They also said they had complied with the tribunal’s June 17, 2026 directions and filed the required affidavits of compliance.

What remains before the share swap takes effect?

The share issue will occur only once the scheme becomes effective, and the filing records further compliance obligations. These include Section 232(3)(i) of the Companies Act, 2013, Rule 8A(1)(w) of the Companies (Incorporation) Rules, 2014, applicable income-tax and goods and services tax requirements, and any direction from sectoral regulators.

The Official Liquidator, High Court, Bombay, raised observations in a September 17, 2026 report on Hinduja Leyland Finance’s overdue loan portfolio, substantial near-term repayment obligations and loan assets classified as fair value through other comprehensive income, or FVTOCI. Hinduja Leyland Finance said in its September 17 reply that expected credit loss provisions as of March 31, 2026 were adequate and that loan assets, net of provisions, fairly represented their realisable value.

Hinduja Leyland Finance also said its valuation methodology complied with Indian Accounting Standard 113 and that it had engaged an independent valuer for identified loan assets. Subject to those observations, the Official Liquidator stated that the company’s affairs had not been conducted in a manner prejudicial to creditors or public interest.

In a September 3, 2026 reply to the tax authority, the companies said the scheme was proposed for bona fide commercial reasons and that tax consequences would be governed by applicable law. They also undertook that any sanction would not limit the Income Tax Department’s right to initiate or continue proceedings where permitted by law.

Conclusion

Ashok Leyland’s stated 59.64% post-merger holding would be 1.48 percentage points below its 61.12% position in Hinduja Leyland Finance. That change follows the proposed issue of 25 NDL Ventures shares for every 10 Hinduja Leyland Finance shares and is not presented in the filing as a disposal by Ashok Leyland.

The next disclosed milestones are the scheme becoming effective, the setting of the record date and the allotment of New Equity Shares. Implementation will also depend on the stated legal, tax, accounting and regulatory compliance requirements, while the Official Liquidator’s observations on loan provisions, repayment obligations and FVTOCI valuations remain relevant matters disclosed in the proceeding.