Pakka Limited Gets NCLT First-Motion Approval for PIL Merger

Pakka Limited received NCLT Allahabad first-motion approval for the merger of its 100%-owned subsidiary Pakka Impact Limited, with April 1, 2025 set as the scheme’s appointed date. The order, pronounced on December 9, 2025 and uploaded on December 11, 2025, allows the companies to move to the final approval stage.

Why is Pakka merging Pakka Impact Limited?

Pakka Limited is seeking to amalgamate Pakka Impact Limited, its wholly owned subsidiary, into the listed parent under a scheme of amalgamation approved by the boards of both companies. Pakka Impact is the transferor company under the proposal, while Pakka is the transferee company.

The boards considered and unanimously approved the scheme at their respective meetings held on May 30, 2025. The proposal was taken forward under Sections 230 to 232 of the Companies Act, 2013, which govern compromises, arrangements and amalgamations, along with the applicable rules for such transactions.

The company had earlier disclosed that its board considered the amalgamation plan in furtherance of a decision taken on March 27, 2024. Under the scheme, Pakka Impact’s undertaking, assets, liabilities, rights and obligations are intended to vest in Pakka once the process becomes effective and the required legal formalities are completed.

Pakka Impact is described as an unlisted public limited company, whereas Pakka is a listed public limited company. Since the transferor is fully owned by the parent, the materials provided state that no new shares will be issued as part of the merger.

What did NCLT Allahabad approve in the first motion?

NCLT Allahabad allowed the joint first-motion application filed by Pakka Impact and Pakka for their proposed amalgamation. The judgment was pronounced on December 9, 2025, and was subsequently uploaded to the tribunal’s website on December 11, 2025.

The tribunal dispensed with meetings of equity shareholders and creditors, recognising the parent-subsidiary structure described in the application. This removes the need for those meetings at the first-motion stage, but it does not amount to final sanction of the scheme.

The order gave both applicant companies the liberty to file a second-motion petition. It also directed them to make a specific request for notices to be sent to the Central Government through the Regional Director, Northern Region of the Ministry of Corporate Affairs, New Delhi.

The tribunal record further states that no intimation to or approval from the Competition Commission of India was required for this scheme. That finding relates to the merger application as presented by the companies and does not remove the need for the remaining statutory, regulatory and procedural steps.

What are the key terms and dates of the scheme?

The scheme provides for Pakka Impact to merge into Pakka with an appointed date of April 1, 2025. The appointed date sets the effective reference date stated in the scheme, while the merger itself remains dependent on final NCLT sanction and completion of applicable formalities.

Pakka’s annual-report disclosure said the scheme remained subject to sanction by the tribunal as of the report date. The December 2025 first-motion order advances the process, but the final legal completion will follow only after the second-motion proceeding and related requirements are concluded.

The legal structure is a merger by absorption, in which the subsidiary is absorbed into its parent. Pakka’s disclosure states that, upon the scheme becoming effective, Pakka Impact’s assets, liabilities, rights and obligations will vest in Pakka in accordance with the scheme and the NCLT order.

How does the order affect Pakka shareholders and operations?

The first-motion approval confirms that the proposed internal merger can proceed to the next tribunal stage, but it does not by itself complete the amalgamation. Pakka has stated that it will now proceed with steps to obtain final approval from NCLT Allahabad.

For shareholders, the supplied disclosures indicate no proposed issue of new shares because Pakka Impact is wholly owned by Pakka. The transaction is therefore an internal group restructuring rather than an acquisition involving an outside seller or a share-exchange ratio for minority shareholders of the subsidiary.

The order also clarifies the legal path for the company’s restructuring. Since shareholder and creditor meetings were dispensed with at the first-motion stage, the immediate process moves to the second-motion petition and the notices directed by the tribunal.

The available disclosure does not quantify the financial contribution of Pakka Impact or specify a financial impact from the merger. Investors assessing the transaction will therefore need to rely on future filings for confirmation of final approval and any accounting or operational disclosures made when the scheme takes effect.

What is the background to Pakka’s earlier merger proceedings?

Pakka has previously undertaken an amalgamation process involving a group entity. In 2020, the board approved a scheme to merge Yash Pakka Limited with Yash Compostable Limited, and the proposal was placed before NCLT Allahabad after in-principle approval from the Bombay Stock Exchange.

NCLT Allahabad gave consent in August 2021 for admission of that amalgamation scheme and for convening meetings of equity shareholders and secured creditors. A corrected order related to that matter was issued on August 26, 2021. The material also records a separate sanctioned merger by absorption of Yash Compostables Ltd, effective from an appointed date of April 1, 2020.

The current Pakka Impact transaction is distinct from those earlier proceedings. Its relevant board approval is dated May 30, 2025, its appointed date is April 1, 2025, and its first-motion order was pronounced in December 2025.

Conclusion

Pakka’s first-motion approval from NCLT Allahabad moves the planned absorption of Pakka Impact into its listed parent through an important procedural stage. The structure involves a wholly owned subsidiary, no new share issuance according to the disclosed information, and the transfer of the subsidiary’s undertaking, assets, liabilities, rights and obligations to Pakka once the scheme becomes effective.

The next item to watch is the second-motion petition and final NCLT sanction. Pakka has said it will pursue final approval, while the tribunal has directed the companies to seek issuance of notices to the specified authorities as part of the remaining process.