GE Power India demerger: NCLT clears order in 2026

NCLT Mumbai sanctions the scheme

The National Company Law Tribunal (NCLT), Mumbai Bench-I has sanctioned a Scheme of Arrangement between GE Power India Limited and JSW Energy Limited under Sections 230 to 232 of the Companies Act, 2013. GE Power India is the demerged company and JSW Energy is the resulting company under the structure approved by the tribunal. The order was pronounced on October 1, 2026, making it a key regulatory milestone for the proposed restructuring. The scheme covers the transfer of GE Power India’s Durgapur-based business to JSW Energy. GE Power India has said a certified copy of the sanction order is awaited. The company will intimate the effective date and record date to stock exchanges after conditions precedent are satisfied. The order has also been uploaded to the NCLT website and the company’s investor relations page for public access.

What exactly moves from GE Power India to JSW Energy

The scheme transfers GE Power India’s Durgapur business that manufactures and supplies power boiler components, pressure vessels, piping and coal mills used in thermal power plants. In the market commentary accompanying the disclosure, the Durgapur unit was described as underutilised and loss-making. The scheme treats this as the “Demerged Undertaking” to be vested in JSW Energy. The appointed date for the demerger is July 1, 2025. The transaction is described as being effective retrospectively from the appointed date, subject to NCLT sanction and completion of conditions. The tribunal considered reports submitted by the Chairperson, the Regional Director and the Income Tax Department before sanctioning the scheme. The bench that sanctioned the scheme included Judicial Member Sushil Mahadeorao Kochey and Technical Member Prabhat Kumar.

Share entitlement ratio approved by the tribunal

A central element of the scheme is the share entitlement for GE Power India shareholders. Under the approved ratio, JSW Energy will issue 10 fully paid-up equity shares of face value Rs 10 each for every 139 fully paid-up equity shares of face value Rs 10 each held in GE Power India. The ratio is subject to adjustments specified in the scheme. The effective and record dates for determining share entitlement are to be announced after the certified copy of the NCLT order is received. GE Power India has indicated it will communicate these dates to stock exchanges once all conditions are met. Until those steps are completed, investors will typically track updates on the effective date and subsequent procedural filings. The share issue mechanics and timing will follow the scheme’s conditions and regulatory processes applicable to listed companies.

Voting outcome: shareholders and creditors back the plan

The scheme was placed before equity shareholders and unsecured creditors following tribunal directions. Tribunal-directed meetings were held on July 20, 2026, after earlier directions dated June 2, 2026. GE Power India’s equity shareholders approved the scheme with 99.99% of votes in favour. Its unsecured creditors approved with 99.9359% by debt value, and 85 of 86 creditors voted in favour. For JSW Energy, equity shareholder support was reported at 99.9999% and unsecured creditors approved the proposal by 100% in value. The NCLT noted that the scheme had received requisite approvals from shareholders and creditors of both companies. These voting outcomes formed part of the evidentiary basis for the tribunal’s sanction. The approvals also reflect that the restructuring followed the standard court-supervised process for arrangements under Sections 230 to 232.

Compliance conditions and next procedural steps

The NCLT sanctioned the scheme subject to compliance with undertakings given by the companies. The Regional Director sought compliance with requirements under the Companies Act, accounting standards, tax laws, FEMA, RBI regulations, and safeguards for creditors and employees. The companies furnished undertakings sought by the Regional Director, as recorded by the tribunal. The tribunal directed the companies to file the certified order and the scheme with the Registrar of Companies (RoC) through e-Form INC-28 within 30 days of receiving the certified order. This filing is a key procedural step for implementing an NCLT-approved scheme. GE Power India has said it is awaiting a certified copy of the sanction order, after which the effective date process will move forward. Investors generally monitor these filings and stock exchange disclosures as they signal progress towards implementation.

Income Tax Department rights preserved

A notable aspect of the NCLT order is how it dealt with tax scrutiny. The tribunal sanctioned the scheme while explicitly preserving the Income Tax Department’s right to examine or recover any tax liability arising from the transaction. It also recorded that the sanction would not affect the department’s right to examine issues of tax liability or tax avoidance linked to the restructuring. This means the corporate action can proceed subject to the scheme’s conditions, while tax authorities retain their statutory powers. Such a carve-out is material for stakeholders because it clarifies that the NCLT approval does not pre-empt tax examination. The order reflects that reports from the Income Tax Department were considered during the sanction process. For investors, the key takeaway is that regulatory clearance for the scheme does not eliminate potential tax assessments that may arise from the transaction. The practical impact will depend on how tax authorities view the transaction once implementation steps are completed.

How the process reached the final NCLT order

The restructuring had been in progress for more than a year before the final sanction. Both companies’ boards approved the scheme in September 2025, initiating the formal process. Subsequent steps included obtaining observation letters from stock exchanges for the listed entities, with disclosures indicating no adverse observations from BSE and a no objection from NSE in early April 2026. The NCLT then issued directions on June 2, 2026 to convene meetings of equity shareholders and unsecured creditors. Those meetings were held on July 20, 2026 and resulted in overwhelming approval across both companies’ stakeholder classes. After considering statutory reports and the approvals, the tribunal sanctioned the scheme on October 1, 2026. The companies have indicated that further steps like receipt of the certified copy, RoC filings and satisfaction of conditions precedent remain before the scheme becomes effective. This sequence is consistent with the layered approvals typically required for schemes under Sections 230 to 232.

Key facts at a glance

Market impact: what investors should track next

From a market perspective, the NCLT sanction removes a major regulatory hurdle that had kept the scheme pending since board approvals in September 2025. However, the implementation timeline now depends on procedural completion, including receipt of the certified copy of the order and filing with the RoC via e-Form INC-28 within the stipulated time. Shareholders tracking the corporate action will also watch for the announced effective date and record date, which will determine eligibility for the JSW Energy share entitlement. The order’s explicit preservation of Income Tax Department rights is another factor investors may factor into their monitoring, because it confirms tax scrutiny is not curtailed by the scheme’s sanction. Operationally, the scheme centres on transferring GE Power India’s identified Durgapur thermal equipment business to JSW Energy, and the market narrative around the unit has included references to underutilisation and losses. For listed-company investors, the key disclosures going forward are likely to be exchange filings on condition satisfaction, the effective date, and the record date. Any further updates will typically come through company announcements and statutory filings as the scheme moves from sanction to execution.

Conclusion

NCLT Mumbai’s October 1, 2026 order formally sanctions the GE Power India-JSW Energy scheme to demerge and transfer the Durgapur undertaking, with an appointed date of July 1, 2025 and a defined share entitlement ratio. The tribunal has also kept the Income Tax Department’s rights intact to examine or recover any tax liability arising from the transaction. The next confirmed steps include receipt of the certified order, subsequent RoC filing through e-Form INC-28 within 30 days of receiving the certified copy, and stock exchange intimation of the effective date and record date once conditions precedent are satisfied.