India Glycols Demerger Gets 100% Nod From Stakeholders

Introduction

India Glycols Limited (IGL) has crossed a critical milestone in its corporate restructuring plan, securing unanimous approval from both its equity shareholders and unsecured creditors for a proposed scheme of arrangement. The NCLT-convened meetings, held on March 24, 2026, resulted in 100% support for the demerger, which will carve out the company's Bio Pharma and Spirits & Biofuel businesses into two separate, publicly listed companies. This overwhelming consensus signals strong stakeholder confidence in the strategic rationale behind the move to unlock value and create focused business entities.

The Decisive Stakeholder Mandate

In two separate meetings conducted via video conferencing, stakeholders of India Glycols voiced their unequivocal support for the demerger. The meeting of equity shareholders saw 4,42,48,625 votes cast in favour of the resolution, representing the entire voting bloc present. Similarly, the meeting of unsecured creditors also passed the resolution with 100% approval, corresponding to a debt value of ₹64,266.50 lakh. The process was overseen by an NCLT-appointed scrutinizer, CA Sumit Agrawal, who confirmed the voting was conducted fairly and transparently, meeting the majority requirements under the Companies Act, 2013.

A Strategic Restructuring

The approved scheme will restructure India Glycols into three distinct entities. India Glycols Limited, the demerged company, will retain its core business of Bio-based Specialties and Performance Chemicals. The demerger will create two new companies: Ennature Bio Pharma Limited, which will focus on the biotechnology and pharmaceutical ingredients market, and IGL Spirits Limited, which will handle the spirits and biofuel operations. This separation is designed to allow each business to pursue independent growth strategies tailored to its specific industry dynamics, enhancing operational efficiency and management focus.

The Journey to Approval

The path to this approval began when the company's board sanctioned the revised demerger plan on May 16, 2025. The National Company Law Tribunal (NCLT), Allahabad Bench, granted its initial approval for the first motion of the scheme on January 15, 2026. This order mandated the company to convene stakeholder meetings, which were initially scheduled for March 9, 2026. However, due to the unavailability of the NCLT-appointed chairperson, the company sought and received a revised order on February 16, 2026, rescheduling the crucial meetings to March 24, 2026.

Shareholder Value and Exchange Ratio

A key component of the demerger is the share entitlement ratio, which determines how shareholders of the parent company will be allocated shares in the new entities. According to the scheme, for every three equity shares held in India Glycols, a shareholder will receive one equity share in Ennature Bio Pharma Limited. For every one equity share held in India Glycols, a shareholder will receive one equity share in IGL Spirits Limited. The appointed date for the scheme is set as April 1, 2026. This restructuring is expected to unlock hidden value for shareholders by allowing the market to value each business independently based on its performance and potential.

Key Financial and Voting Data

Regulatory Scrutiny and Other Matters

While the stakeholder approval is a significant step, the demerger is not without its complexities. The company's Ennature Bio-Pharma division is currently contesting a customs duty demand of ₹32.95 lakh plus an equivalent penalty, against which it plans to appeal. Furthermore, CARE Ratings has placed IGL's bank facilities on 'Rating Watch with Developing Implications' pending the outcome of the restructuring. The company is also involved in other civil and tax proceedings that could represent future liabilities. These factors highlight the ongoing regulatory and legal landscape the company must navigate.

Recent Positive Legal Outcomes

On a positive note, India Glycols has recently seen favourable outcomes in some of its tax disputes. In December 2025, the company won an appeal against a ₹1.92 crore tax demand related to Transitional Input Tax Credit, with the entire demand being dropped. In another case from the same month, the ITAT ruled in the company's favour concerning a tax demand of ₹5.06 crore. These successful appeals demonstrate the company's proactive approach to managing its legal and tax-related challenges effectively.

The Path Forward

With the unanimous approval from shareholders and creditors in hand, India Glycols is now positioned to file its second motion petition with the NCLT for final sanction of the demerger scheme. The board is empowered to make any necessary modifications as required by regulatory authorities to implement the plan. The immediate next step is securing this final NCLT approval. Following the sanction, the focus will shift to the formal implementation of the demerger and the subsequent listing of Ennature Bio Pharma Limited and IGL Spirits Limited on the BSE and NSE, which will complete the restructuring process.