Kitex Garments demerger vote: key July 2026 details

What happened on July 24, 2026

Kitex Garments Limited completed separate, video-conferenced meetings of its equity shareholders and unsecured creditors on July 24, 2026 to consider and approve a Scheme of Arrangement involving Kitex Childrenswear Limited. The meetings were held under directions of the National Company Law Tribunal (NCLT), Kochi Bench. The proceedings form part of the approval process required under Sections 230 to 232 of the Companies Act, 2013.

The sessions followed a remote e-voting window that closed a day earlier, on July 23, 2026. The company also kept an electronic voting facility open for a brief period during the live meetings for those who had not voted remotely. The meeting process is a key procedural milestone because the scheme must secure the requisite majority to progress through the tribunal-led framework.

NCLT order and case reference

The meetings were convened pursuant to an NCLT order dated January 22, 2026, passed by the Kochi Bench. The tribunal order was issued in case number CA(CAA)/01/KOB/2026. In line with the tribunal’s directions, Kitex Garments arranged the meetings through video conferencing or other audio visual means.

The wider demerger process had earlier moved through board-level approvals. The boards of directors of both companies unanimously approved the scheme of demerger in February 2025, as stated in the disclosed material. The companies also informed the tribunal that the proposed scheme would not affect the rights or interests of their creditors.

Meeting schedule and who chaired the sessions

Both meetings on July 24 were chaired by Mr. Kuldip Kumar Kareer, a former Judicial Member of the NCLT, appointed as chairman for the proceedings. Mr. Rajmohan R, a practicing chartered accountant, served as the scrutinizer for both meetings. Ms. Dayana Joseph, Company Secretary and Compliance Officer of Kitex Garments Limited, facilitated the meetings and confirmed the presence of the requisite quorum as per the NCLT directions.

Voting window and eligibility dates

Remote e-voting for the scheme resolutions was available from Monday, July 20, 2026 at 9:00 A.M. IST to Thursday, July 23, 2026 at 5:00 P.M. IST. The company also provided an additional 15-minute window during each live meeting for participants who had not cast their votes remotely.

The cut-off date for determining eligibility for equity shareholders was July 17, 2026, while the cut-off date for unsecured creditors was March 31, 2026. These dates were disclosed as part of the meeting notice information and were aligned with the process set out for tribunal-directed meetings.

What the scheme proposes

The primary business at both meetings was a resolution to approve the Scheme of Arrangement between Kitex Childrenswear Limited, described in the disclosures as the demerged company, and Kitex Garments Limited, described as the resulting company. The scheme is presented as a demerger of the textile undertaking from Kitex Childrenswear Limited and its merger into Kitex Garments Limited.

Kitex Garments stated that the scheme seeks approval without modifications, consistent with the tribunal’s directives. The chairman briefed attendees on the scheme’s details before the voting process began.

Share issuance and entitlement ratio

As consideration under the scheme, Kitex Garments Limited will issue new equity shares to the shareholders of Kitex Childrenswear Limited based on a disclosed entitlement ratio. The scheme document states that Kitex Garments will issue 9,706 equity shares of face value ₹1 each for every 100 equity shares of Kitex Childrenswear of face value ₹1 each, to shareholders of Kitex Childrenswear as on the record date defined in the scheme.

The same disclosure states this will result in the issuance of 92,197,779 new equity shares of Kitex Garments. The share issuance mechanism is central to how the economic interest in the demerged undertaking is transferred to the shareholders of the demerged company.

Financial projections cited in the addendum

Kitex Garments filed an addendum to the notice for the July 24, 2026 shareholder meeting, providing financial projections. As per the addendum, Kitex Garments’ revenue is projected to rise from ₹1,347 crore in FY26 to ₹2,460 crore by FY30. Profit After Tax (PAT) is projected to reach ₹738 crore by FY30.

The disclosed material also provides projected post-arrangement net worth figures. Kitex Garments’ net worth is projected to increase to ₹1,287.75 crore post-arrangement, while Kitex Childrenswear’s net worth is expected to adjust to ₹88.26 crore following the demerger (converted from ₹1,28,775.19 lakh and ₹8,826.31 lakh, respectively).

Shareholding changes highlighted by the company

The addendum also outlines how the scheme is expected to change the shareholding structure of Kitex Garments Limited. Promoter holding is expected to increase to 59.46% post-scheme, compared with 40.74% pre-scheme. Public shareholding is expected to reduce to 29.65%.

The disclosure further states that Kitex Childrenswear Limited’s stake in Kitex Garments Limited will reduce from 15.92% to 10.89% after completion of the scheme. These numbers indicate a meaningful post-transaction shift in the listed company’s ownership pattern, driven by the new share issuance.

How the meetings ran and what participants asked

According to the filed summary of proceedings, no questions were registered by shareholders or creditors for the Q and A session. A chat box option was available during the virtual meetings for participants to raise queries or express views, but the company reported no registered questions.

While the absence of questions does not indicate voting outcomes, it does suggest the meetings followed a procedural format focused on the resolution and voting steps outlined by the tribunal order.

Compliance, filings, and what comes next

Kitex Garments stated that the meetings were conducted in compliance with the Companies Act, 2013, SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, and relevant circulars issued by the Ministry of Corporate Affairs and SEBI. The company said a summary of proceedings was filed with BSE and NSE as required.

The scheme requires requisite majority approval under Sections 230 to 232 of the Companies Act, 2013. The disclosed material also states that the company confirmed the scheme’s compliance with applicable securities laws and that no regulatory actions are pending against the involved entities. The next steps beyond these meetings are expected to follow the tribunal-led process applicable to such schemes, based on the directions and procedural requirements already referenced in the company’s disclosures.