Inox Green Demerger: NCLT Approves Power Business Spinoff

NCLT Sanctions Demerger Scheme

The Ahmedabad bench of the National Company Law Tribunal (NCLT) has officially approved the demerger scheme for Inox Green Energy Services Limited (IGESL). The order, pronounced on March 13, 2026, sanctions the separation of IGESL's power evacuation business into a newly formed entity, Inox Renewable Solutions Limited (IRSL). The appointed date for this corporate restructuring is set as October 1, 2024.

This approval marks the final regulatory step in a process that began with board approvals and received no-objection certificates from stock exchanges in July 2025, followed by unanimous consent from all stakeholders, including shareholders and creditors, in meetings held on November 1, 2025.

Strategic Rationale for the Split

The primary objective of the demerger is to create two distinct, publicly traded companies with specialized operational focuses. IGESL will now concentrate exclusively on its core business of providing operations and maintenance (O&M) services for wind turbine generators. Meanwhile, IRSL will manage the demerged power evacuation business, which includes the infrastructure required to transmit power from wind farms to the grid.

Management believes this separation will lead to greater operational efficiency and allow each entity to pursue independent growth strategies. By creating two pure-play companies, the structure is expected to attract different sets of investors and strategic partners better aligned with the specific risk and return profiles of each business. This focused approach is anticipated to unlock greater shareholder value over the long term.

Impact on Shareholders and Market

Under the terms of the approved scheme, shareholders of Inox Green Energy Services will receive shares in the new company. For every 1,000 shares held in IGESL, shareholders will be allotted 122 equity shares of Inox Renewable Solutions Limited. This ensures that existing investors retain a stake in both the O&M and the power evacuation businesses.

Following the announcement, the market registered a reaction. On the day of the NCLT approval, shares of Inox Green Energy Services were trading down by 4.5% at INR 144.72 on the National Stock Exchange, reflecting the market's adjustment to the new corporate structure and the segregation of assets.

A Key Financial Hurdle for the New Entity

A significant point of concern for the newly formed Inox Renewable Solutions Limited is a pending financial liability. The company faces an outstanding Income Tax demand of ₹96.81 crore related to the Assessment Year 2023-24. These assessment and appellate proceedings are currently pending.

The resolution of this tax demand will be a critical first task for IRSL's management. Successfully navigating this issue is essential for establishing financial stability and maintaining investor confidence in the new entity as it begins its journey as an independent, listed company.

Demerger Details at a Glance

The Path to Two Focused Companies

The demerger creates a clear distinction between two critical functions in the renewable energy value chain. IGESL, as India’s only listed pure-play renewable O&M services company, will continue to build on its extensive portfolio, which manages approximately 13.3 GW of renewable assets under long-term contracts. The company has stated that the demerger will not affect its revenues or future guidance, as it continues to focus on its core service offerings.

On the other hand, IRSL will be a specialized entity managing the capital-intensive power evacuation infrastructure. This includes substations and transmission lines essential for connecting wind power projects to the grid. This focused structure is designed to enhance accountability and corporate governance for both companies.

Conclusion and Forward Outlook

The NCLT's approval is a pivotal moment for Inox Green Energy Services, concluding a well-defined restructuring plan. The creation of two specialized entities, IGESL and IRSL, is a strategic move to enhance focus and drive growth in their respective domains. While IGESL is set to strengthen its position in the O&M market, the immediate challenge for IRSL will be to resolve its outstanding tax liabilities. The next steps will involve the formal listing of IRSL on the stock exchanges and the execution of its independent business strategy.