Shalimar Paints reverse merger: ₹1,000cr QIP in 2026

What the board approved and why it matters

Shalimar Paints Ltd. has cleared a proposed reverse merger with the parent of B2B building materials platform Infra.Market, creating a potential route for the Tiger Global-backed business to enter the public markets through a listed entity. The company’s board approved the transaction at its meeting held on August 12, 2026. The structure centres on Shalimar Paints investing in Hella Infra Market Ltd., the company behind Infra.Market, through a share-swap arrangement. Instead of cash, existing shareholders of Hella Infra Market would receive Shalimar Paints’ equity shares and compulsorily convertible preference shares (CCPS) as consideration. The board approvals are subject to shareholder and regulatory clearances, and Shalimar Paints has proposed convening an extraordinary general meeting (EGM) to seek shareholder approval. The final swap ratio and other details are to be disclosed following valuation and regulatory processes and in line with stock exchange requirements.

Reverse merger structure via Hella Infra Market

Under the proposed arrangement, Shalimar Paints will acquire Hella Infra Market through a share-swap transaction. This means Infra.Market investors would receive securities of listed Shalimar Paints instead of cash. Shalimar Paints also noted that the swap ratio will be based on a valuation report of both companies. The board has discussed a possible “unification” of the two companies at a later stage, indicating that the share swap could be an initial step before any broader combination. The company also stated that Hella Infra Market may subsequently become an unlisted material subsidiary of Shalimar Paints. As of the current disclosure, the transaction remains conditional and will proceed only after required shareholder approvals and regulatory clearances.

Authorised capital expansion and new CCPS authorisation

To facilitate the larger transaction framework, the board approved a major increase in authorised share capital. Shalimar Paints plans to increase authorised share capital from ₹20 crore to ₹600 crore by way of an increase in equity share capital. In addition, the board approved adding on-cumulative, non-participating compulsorily convertible preference shares (CCPS) amounting to ₹400 crore into the authorised capital clause of the Memorandum of Association. This CCPS authorisation is described as 200 crore preference shares of ₹2 each, with a coupon rate of 0.001%. These steps expand the headroom required for issuing securities as part of the non-cash share swap and other approved fundraising routes.

Preferential issue of equity shares for cash

Alongside the non-cash swap issuance, Shalimar Paints approved a separate cash fundraising through a preferential issue. The board approved raising funds through the issue of up to 1,24,54,608 equity shares of face value ₹2 each, at an issue price of ₹85 per share (including a premium of ₹83). The aggregate size of this preferential equity issue is ₹105.86 crore. The company also separately referenced an approved issuance of equity shares worth about ₹3,544.69 crore on a preferential basis to promoters and non-promoter allottees as part of the proposed transaction framework.

CCPS issuance for non-cash consideration in the share swap

For the consideration other than cash in the proposed reverse merger, the board approved issuing up to 81,12,02,664 CCPS of face value ₹2 each, at an issue price of ₹85 per security (including a premium of ₹83). This CCPS issuance aggregates to about ₹6,895.22 crore on a preferential basis. In one disclosure summary, the securities being issued as part of the non-cash transaction were valued at about ₹10,440 crore, reflecting the combined value of equity shares (about ₹3,545 crore) and CCPS (about ₹6,895 crore), both at the issue price of ₹85.

Qualified Institutions Placement proposal up to ₹1,000 crore

Separately, the Shalimar Paints board approved a proposal for raising of funds through a Qualified Institutions Placement (QIP) of up to ₹1,000 crore. The QIP, if executed, would be an additional capital raising route alongside the preferential issuances connected to the share swap structure. The company has indicated that the EGM will be used to seek the requisite shareholder approvals for the broader transaction steps, with further details to be disclosed as per applicable stock exchange requirements.

Stock move: upper circuit reaction after the announcement

Following the board’s approval of the proposed reverse merger, Shalimar Paints’ shares were reported to be locked in an upper circuit of 5% on Thursday, August 13. One market update noted the stock jumped 5% to hit the upper circuit at ₹87.04 during trade after the announcement. Separately, the current share price was stated as ₹86.88 at the close of the market. These prices were reported in the context of the board-approved reverse merger plan and the associated fundraising proposals.

Key numbers at a glance

Shareholding snapshot from recent quarters

The shareholding data provided shows promoter holding staying unchanged at 74.96% across multiple quarters.

Business context: coatings portfolio and international associations

Shalimar Paints’ product references include Xtra, Superlac, Shaktiman, Superlac Hi-Gloss and Hussain Collection. The industrial coatings segment is described as having associations with companies such as Pinchin Johnson Co. and International Paints PLC of the U.K. The company manufactures and markets industrial coatings, aviation coatings, marine paints, and coatings for metal decoration and food can lacquers. This context matters because the proposed reverse merger would place a large B2B building materials platform alongside a listed paints and coatings business, subject to approvals and final structuring.

Corporate details and identifiers mentioned

The address provided for the company includes Stainless Centre, 4th Floor, Plot No. 50, Sector-32, Gurgaon, Haryana 122001, with telephone number 0124-4616600. The text also referenced the code “509874” in proximity to the company information. Separately, the material provided includes a line stating: “Shalimar Paints Names Kuldip Raina As MD And CEO,” without additional detail in the same excerpt.

Market impact and what to watch next

From a market perspective, the immediate impact was a sharp move that pushed the stock to a 5% upper circuit on August 13, following the board decision a day earlier. For investors, the key near-term variables are procedural rather than operational: shareholder approvals at the proposed EGM, regulatory clearances, and the eventual disclosure of the final swap ratio and other transaction details. The structure also includes multiple security types and fundraising routes, including preferential equity, non-cash CCPS issuance, and a potential ₹1,000 crore QIP. Each step may carry separate approvals and disclosure requirements, and the company has indicated it will disclose details in line with stock exchange rules.

Conclusion

Shalimar Paints’ board has approved a reverse merger structure involving Infra.Market’s parent Hella Infra Market via a share swap, along with a large set of authorised capital and securities issuance approvals and a proposed ₹1,000 crore QIP. The transaction remains subject to shareholder and regulatory approvals, and the company has proposed convening an EGM. Investors will track the final swap ratio and additional disclosures as they are released under the required valuation and regulatory processes.