Balkrishna Paper Mills capital reduction: e-voting 2026

What shareholders are being asked to vote on

Balkrishna Paper Mills Limited has started a remote e-voting process to seek shareholder approval for a Scheme of Reduction of Share Capital. The company is looking to reduce share capital and write off accumulated losses of ₹278.39 crore as of September 30, 2025. The proposal includes cutting the face value of equity shares from ₹10 to ₹1 and cancelling the company’s issued preference share capital. Alongside the capital restructuring, the company is also seeking approval for material related party transactions, including Inter Corporate Deposits (ICDs) up to ₹25 crore per financial year from specified entities.

The company has positioned the scheme as a balance sheet clean-up exercise to reflect its financial position more accurately by setting off accumulated losses against reserves and share capital. The plan requires shareholder consent through postal ballot and remote e-voting, followed by regulatory approvals to become effective.

Remote e-voting window, cut-off date, and result timeline

The remote e-voting period began at 9:00 a.m. IST on June 3, 2026 and is scheduled to close at 5:00 p.m. IST on July 2, 2026. The cut-off date for determining shareholder eligibility has been set as May 22, 2026. The postal ballot results are expected to be declared on or before July 4, 2026.

Mr. Prasen Naithani, Practicing Company Secretary, has been appointed as the scrutinizer to conduct the remote e-voting and postal ballot process. The outcome of the vote is one of the key prerequisites before the company can move forward to seek tribunal and other regulatory clearances.

The core proposal: equity face value reduction from ₹10 to ₹1

The Board of Directors has proposed reducing the issued, subscribed and paid-up equity share capital by lowering the face value of 3,22,19,532 equity shares from ₹10 each to ₹1 each. Importantly, the number of equity shares remains unchanged. The reduction is designed to enable the company to adjust its accumulated losses through an accounting set-off.

As described in the scheme-related disclosures, no consideration is payable to equity shareholders for the face value reduction. After the face value change, the revised equity share capital is stated as ₹3.22 crore.

How the company plans to set off ₹278.39 crore of losses

The accumulated losses identified for write-off total ₹278.39 crore as of September 30, 2025. The scheme outlines a sequence for adjusting these losses. First, the company proposes to use its Securities Premium Reserve of ₹23.29 crore. The remaining losses are then proposed to be adjusted against the paid-up equity share capital through the reduction in face value.

This approach, as described, is meant to rationalise the capital structure and align it with the company’s financial reality after years of losses.

Preference share capital cancellation: ₹110 crore to be extinguished

In addition to the equity change, the scheme proposes cancelling and extinguishing the entire issued preference share capital of ₹110.00 crore. This comprises 1,10,00,000 6.5% Non-Cumulative Redeemable Preference Shares.

The company has stated that the consideration payable to preference shareholders will not be paid immediately. Instead, it will be treated as an unsecured, non-interest-bearing loan in the company’s books until adequate funds become available for discharge.

Related party transactions: ICDs up to ₹25 crore per year

The postal ballot items also include approval for material related party transactions. Among the items mentioned are Inter Corporate Deposits up to ₹25 crore per fiscal year from specified entities.

The inclusion of related party approvals alongside a capital reduction vote typically reflects the company’s need to secure shareholder consent for transactions that may be required for liquidity management or group-level funding arrangements, within the thresholds disclosed.

Regulatory pathway: NCLT approval remains essential

Even if shareholders approve the scheme through the remote e-voting process, it will not take effect automatically. The scheme requires approval from the National Company Law Tribunal (NCLT) and other regulatory authorities to become effective. The company has also referenced stock exchange processes and regulatory steps in its scheme communications.

This sequencing matters for investors because the shareholder vote is a gateway step, while the tribunal process determines whether the reduction can be legally implemented and recorded.

Stock exchange communication and the SEBI review change

Balkrishna Paper Mills has disclosed that it received letters from BSE and NSE dated April 13, 2026 regarding the Scheme of Reduction of Share Capital. Separately, the company has stated that BSE and NSE have returned the proposed scheme following an amendment to SEBI Listing Regulations (Regulation 37(6), effective December 13, 2024).

Under the revised classification described by the company, the scheme is treated as a disclosure rather than requiring a full SEBI review process. The stated implication is that the company avoids a longer SEBI review cycle, although shareholder approval and NCLT approval remain crucial.

Auditor remarks and operational context

The company’s statutory auditors, M/s D S M R & Co, issued a qualified opinion that highlighted negative net worth and the discontinuance of manufacturing activities at Ambivali. This context is relevant because capital reduction schemes are often pursued when a company aims to clean up the balance sheet after sustained losses, particularly where net worth has been impacted.

The company has also disclosed earlier financial actions aimed at improving its financial standing, including raising ₹45.10 crore through a Rights Issue in April 2024 to address debt.

Key facts at a glance

Why the proposal matters for investors and the market

For equity investors, the key point is that the face value reduction does not change the number of shares, but it reduces paid-up capital and enables an accounting set-off of losses. The scheme is also tied to a broader effort to present a clearer balance sheet position after accumulated losses.

For preference shareholders, the proposal is more direct: the preference share capital is proposed to be cancelled, while the payout is deferred and recorded as an unsecured, non-interest-bearing loan until funds are available. And for governance-focused investors, the inclusion of related party transaction approvals highlights the need to track group-level funding arrangements and the limits being sought.

What to watch next

The immediate next milestone is the declaration of postal ballot results on or before July 4, 2026. If approved by shareholders, the scheme will move through the required regulatory path, including NCLT approval, before it can be implemented.

The company’s subsequent disclosures around tribunal filings, approval timelines, and implementation steps will be central to assessing how quickly the balance sheet restructuring can be completed and reflected in reported capital and reserves.