Kobo Biotech Resolution Plan Clears ₹70.11 Crore Payout

NCLT approves the resolution plan

The National Company Law Tribunal, Hyderabad Bench, approved the resolution plan for Kobo Biotech Limited on May 11, 2026. The plan was submitted by Beaufond Industries Limited. The approval brings the company’s corporate insolvency resolution process closer to implementation. It also averts liquidation under the approved restructuring framework. The disclosure was reported on May 13, 2026. Kobo Biotech is associated with Avon Organics Ltd, which specialises in producing diketene used in pesticides, chemicals, pharmaceuticals and dyestuffs. The tribunal-approved plan includes a merger and demerger structure. Its execution will now be a key point for creditors and shareholders to monitor.

Payments proposed under the scheme

The approved plan provides for total payments of ₹70.11 crore to creditors and for CIRP costs. Financial creditors are to receive ₹67.78 crore under the proposal. CIRP costs account for ₹2.30 crore. The reported figures place financial creditors at the centre of the distribution framework. JM Financial Asset Reconstruction Company Limited held a 99.12% voting share in the committee of creditors. This concentration gives the financial creditor a central role in the resolution process. The announcement does not provide a separate distribution break-up for other creditor categories. The total stated payout and the individual payment figures have been reported as part of the approved plan.

Key figures from the approved plan

Merger and demerger form part of restructuring

The resolution plan is structured around a merger and demerger. These steps form part of the mechanism approved by the NCLT to resolve Kobo Biotech’s insolvency process. The available disclosure does not set out the detailed sequence or legal mechanics of the merger and demerger. It does, however, confirm that the structure is intended to enable the company’s resolution rather than liquidation. All existing liabilities, claims and dues against Kobo Biotech are to be extinguished after implementation. The disclosure states that no residual liabilities will survive after the plan is implemented. This makes completion of the plan particularly important for the company’s creditors and stakeholders. The company has not disclosed a completed post-implementation board composition in the cited filing.

Shareholding will change sharply

The scheme materially changes the position of existing public shareholders. Public shareholding is expected to decline from 55.05% before the scheme to 2.00% after the scheme. This represents a reduction of 53.05 percentage points in the public stake. The plan also provides that no shares will be issued to the pre-scheme promoters or promoter group of Kobo Biotech. These terms mean the resolution is not only a creditor settlement exercise but also a substantial ownership restructuring. Shareholders should distinguish between the continuation of the corporate entity and the shareholding outcome under the approved scheme. The filing does not provide the complete details of the incoming board. It also does not specify a final handover date.

Financial context before the resolution

Kobo Biotech’s reported pre-CIRP net worth stood at ₹132.91 crore as of March 31, 2024. Its assets were reported at ₹71.39 crore on the same date. Beaufond Industries, the resolution applicant, had a reported net worth of ₹333.18 crore as of March 31, 2025. These figures provide financial context to the approved proposal. They do not by themselves establish the future operating performance of the restructured business. The plan’s approval indicates that the NCLT accepted the resolution proposal presented in the insolvency proceedings. Implementation remains the next operational stage. The disclosed figures should be read alongside the stated creditor payments and ownership changes.

Resolution professional managed company affairs

During the CIRP, the usual board and committee provisions under SEBI’s listing regulations were not applicable. Under Regulations 15(2A) and 15(2B) of the SEBI LODR Regulations, the functions of the board and committees were discharged by the resolution professional during the process. The NCLT Hyderabad Bench appointed Ms Namrata Amol Randeri as the new resolution professional on January 17, 2025. She replaced Mr Ravindra Chaturvedi, the interim resolution professional, who was discharged from his duties. The order was cited as IA (IBC) 85/2025 in CP(IB) No. 277/7/HDB/2023. The company’s directors were suspended during the CIRP. Their powers vested with the resolution professional under the insolvency framework.

Board status and monitoring arrangements

Ajit Kamath is identified as Kobo Biotech’s chairman and non-executive director. The suspended management listed in the directors’ report included Ajit Kamath, Rajendra Kaimal, Dr Sunil Pitroda and Urja Shah. Abhishek Buddhadev was also listed as a non-executive independent director until May 30, 2024. The monitoring committee will manage Kobo Biotech’s day-to-day affairs until handover under the approved plan. This arrangement is designed to oversee the transition from the insolvency process to the plan’s implementation. The filing indicates that the new board composition will be determined under the resolution plan. However, complete details of that composition were not available in the disclosed information. The monitoring period and implementation of the merger-demeger structure remain the immediate matters to track.

Market relevance for shareholders and creditors

For creditors, the NCLT approval provides a defined payment framework and avoids liquidation under the stated resolution plan. Financial creditors are allocated ₹67.78 crore, while ₹2.30 crore is earmarked for CIRP costs. For public shareholders, the material issue is the expected reduction in their stake to 2.00%. Pre-scheme promoters are not to receive shares under the arrangement. The extinguishment of past liabilities is another central feature of the approved plan. But the disclosure does not provide operating projections, updated financial metrics or a complete post-implementation governance structure. As a result, the implementation disclosures will be important for assessing the next stage. The company’s immediate focus is expected to remain on completing the NCLT-approved process and handover.

What comes next

The approval of Beaufond Industries’ plan marks a formal turning point in Kobo Biotech’s insolvency process. It establishes the reported ₹70.11 crore payout framework, a merger and demerger route, and the proposed extinguishment of existing liabilities. It also confirms a major reset in the company’s shareholder structure. The monitoring committee will continue to manage daily affairs until handover. The new board is to be constituted according to the plan, although full details have not been disclosed. Stakeholders will now watch for implementation updates, execution of the merger-demeger steps and handover arrangements. The next disclosures should clarify the post-resolution governance structure. They may also provide further information on the timetable for carrying out the approved scheme.