Siyaram Silk Mills NCLT clears bonus prefs issue 2026

What the NCLT approval means

Siyaram Silk Mills Limited has received approval from the National Company Law Tribunal (NCLT), Mumbai Bench, for a Scheme of Arrangement that allows the company to issue preference shares by way of bonus to equity shareholders. The order is dated July 21, 2026, and sanctions the scheme under Section 230 of the Companies Act, 2013. The company said the move is aimed at distributing surplus reserves by utilising its general reserves. The preference shares are proposed as a listed security, positioned as an alternative to distributing surplus through cash. The scheme, as described in disclosures and the order, is intended to reward shareholders while maintaining liquidity for obligations to lenders and other stakeholders. The company also stated the scheme will be implemented after it receives the certified copy of the tribunal’s order.

Tribunal observations and bench details

The NCLT stated that, based on the material on record, the scheme appears to be fair and reasonable, compliant with statutory requirements, and not contrary to public policy. The order was passed by a bench comprising Judicial Member K.R. Saji Kumar and Technical Member Anil Raj Chellan. The petition was filed under Section 230 of the Companies Act, 2013. The tribunal noted that required stakeholder approvals were in place and recorded that no objections had been received from stakeholders. It also clarified that the Income Tax Department remains at liberty to examine any tax implications arising from the scheme.

Stakeholder approvals leading up to the order

The company’s board of directors unanimously approved the scheme on October 26, 2024. After that, equity shareholders and unsecured creditors approved the proposal in meetings held on December 29, 2025. These approvals were part of the process directed by the tribunal in earlier proceedings. With these steps completed and compliances noted, the NCLT sanctioned the scheme on July 21, 2026. Siyaram Silk Mills informed stock exchanges that a copy of the order is available on the tribunal’s and the company’s websites.

Bonus preference shares: structure and ratio

Under the scheme, fully paid-up preference shares will be issued to eligible equity shareholders as of the record date. Allotment will be made to shareholders whose names appear in the register of members or in depository records on the record date. The scheme involves two series of preference shares, described as Series I and Series II, each with a face value of ₹10. The preference shares will be issued in dematerialized form. The company also indicated that the preference shares will be listed securities, which it described as offering flexibility in liquidity management until redemption.

Use of reserves and “no release of assets” at issuance

Siyaram Silk Mills stated that the scheme is designed to optimise the use of substantial surplus reserves that exceed current and future business needs. At the same time, it has positioned the plan as one that maintains sufficient liquidity to meet obligations to lenders and other stakeholders. The company stated the preference shares will be issued without any release of assets at the time of issuance. The broader rationale provided was to distribute excess funds to shareholders while maintaining strong corporate governance and transparency.

Compliance actions and statutory timelines

The tribunal directed the company to file a certified copy of the order and the scheme with the Registrar of Companies within 30 days of receipt. It also directed the company to submit the order to the Superintendent of Stamps for stamp duty adjudication within 60 days. Separately, the company undertook to comply with statutory requirements, including filing returns of allotment with the Registrar of Companies and adhering to regulations set by the Securities and Exchange Board of India (SEBI) and stock exchanges. Siyaram Silk Mills told exchanges it would take further steps to give effect to the scheme upon receipt of the certified copy of the NCLT order.

Dividend update: record date and payment timeline

Alongside the scheme update, Siyaram Silk Mills fixed Saturday, July 25, 2026 as the record date to determine shareholder entitlement for the final dividend for the financial year ended March 31, 2026. The board recommended a final dividend of ₹5 per equity share of face value ₹2 each, subject to declaration by members at the ensuing 48th Annual General Meeting. If declared, payment will be made on or after August 7, 2026, subject to deduction of tax at source.

Stock and market snapshot provided with the update

In the market data carried with the update, Siyaram Silk Mills was shown at ₹590.75, up ₹17.50 or 3.05%. The market capitalisation was listed as ₹2,680.24 crore, and the company was tagged under the textiles industry. The 1-year performance figure shown was -21.35%. The company’s equity shares are listed on BSE and NSE.

Other disclosed corporate developments in the timeline

The material also referenced a promoter transaction and an investor holding change dated March 23, 2026. It stated that promoter Abhishek S. Poddar sold 3,15,000 equity shares through an open market transaction on that date. It also stated that DPP Enterprises LLP acquired 3,15,000 equity shares on March 23, 2026 through open market purchase, increasing its shareholding from 0.29% to 0.98%. Separately, the company had earlier disclosed an NCLT hearing notice for its scheme petition, scheduled for April 16, 2026 at 10:30 a.m. before the NCLT Mumbai Bench, and said it published newspaper advertisements on March 20, 2026 in Business Standard and Navshakti following NCLT directions dated March 9, 2026.

Why this matters for shareholders and governance

The scheme changes the form in which surplus reserves are distributed, shifting from cash distribution to an issuance of listed preference shares by way of bonus. For shareholders, the key operational points are the eligibility based on holdings on the record date and the specific allotment ratio for the two preference share series. For the company, the next steps are procedural and time-bound, including filings with the Registrar of Companies and submission for stamp duty adjudication, as directed by the tribunal. The tribunal’s note that the Income Tax Department remains free to examine tax implications is also a relevant caveat within the overall approval.

Conclusion

Siyaram Silk Mills has secured NCLT Mumbai approval to proceed with its Scheme of Arrangement for issuing bonus preference shares out of general reserves, following board and stakeholder approvals already completed. The company has said it will implement the scheme after receiving the certified copy of the NCLT order and completing required filings and formalities. Separately, shareholders will track the July 25, 2026 record date for the FY26 final dividend recommendation and the payment timeline on or after August 7, 2026 if the dividend is declared at the 48th AGM.