Dharti Proteins Sets Feb 13 Record Date for 95% Capital Cut

Dharti Proteins Limited has officially set February 13, 2026, as the record date for a substantial capital reduction. This move, part of a resolution plan approved by the National Company Law Tribunal (NCLT), will see the company's equity share base shrink by over 95%, from 1,02,77,200 shares to just 5,00,000 shares. The decision marks a critical step in the company's restructuring process following its insolvency proceedings.

NCLT Mandate and Restructuring

The capital reduction follows an NCLT order dated November 18, 2025, which approved the resolution plan submitted by Mr. Jatinbhai Ramanbhai Patel, the Successful Resolution Applicant (SRA). The primary goal of this corporate action is to reorganise the company's finances and ownership structure to facilitate a revival. The board meeting on February 9, 2026, formalized the record date to determine shareholder eligibility for the new share allotment.

Details of the New Capital Structure

The plan involves the complete cancellation and extinguishment of the current 1,02,77,200 equity shares. In their place, 5,00,000 new equity shares with a face value of Rs. 10 each will be issued. This drastic reduction is designed to clean up the balance sheet and transfer control to the new management team tasked with turning the company around.

Allocation of New Shares

The newly issued 5,00,000 shares will be distributed among three key groups. The Successful Resolution Applicant, Mr. Jatinbhai Ramanbhai Patel and his promoter group, will receive the controlling stake of 4,25,000 shares. The secured financial creditor, Goenka Business & Finance Limited, will be allotted 50,000 shares in addition to an upfront cash payment. The remaining 25,000 shares will be allocated to the existing public shareholders on a proportional basis.

Impact on Public Shareholders

For public shareholders who currently hold a combined 1,00,98,748 shares, this restructuring results in severe dilution. Their collective holding will be consolidated into just 25,000 shares. The plan also specifies that any fractional entitlements resulting from the proportional allotment will be rounded down to zero, with no cash compensation provided for these fractions. This means a significant reduction in the number of shares held by each retail investor.

Extinguishment of Promoter Holdings

A crucial aspect of the resolution plan is the complete cancellation of shares held by the company's original promoters. Their entire stake will be extinguished without any compensation, effectively wiping out their ownership and paving the way for the new SRA to take control. This is a common outcome in NCLT-driven insolvency resolutions, where existing equity holders, particularly promoters, often bear the largest losses.

Financial Snapshot and Market Position

Dharti Proteins has been operating under financial distress, as indicated by its status as a company under bankruptcy proceedings. Financial metrics reflect this struggle, with a market capitalization of approximately Rs. 3.55 crore, a negative earnings per share (EPS) of -0.07, and a negative return on equity (ROE) of -1.51%. The capital reduction is a necessary, albeit harsh, measure to address the company's precarious financial health.

Summary of Capital Restructuring

Outlook for the Future

The future of Dharti Proteins is now tied to the strategic direction and operational execution of the new management led by the SRA. While the restructuring provides a path out of insolvency, the road to recovery and profitability will likely be challenging. For the remaining public shareholders, the value of their diminished holdings will depend entirely on the success of this turnaround effort. Investors will need to monitor the company's performance closely in the quarters following the completion of this ownership transition.

Conclusion

The fixing of the February 13, 2026 record date is a definitive step in implementing Dharti Proteins' NCLT-approved resolution plan. The drastic capital reduction will fundamentally reshape the company's ownership, wiping out old promoters and severely diluting public shareholding while handing control to a new applicant. This marks the beginning of a new chapter for the company, with its future prospects now resting on the new leadership's ability to revive its operations.