VMS TMT approves Aditya Ultra Steel merger in 2026

What the board approved

VMS TMT Limited said its Board of Directors has approved a Scheme of Amalgamation to merge Aditya Ultra Steel Limited (AUSL) into VMS TMT. The proposal is structured under Sections 230-232 of the Companies Act, 2013. The company informed the exchanges under Regulation 30 of the listing regulations, after considering recommendations from the Audit Committee and the Committee of Independent Directors. The stated objective is to consolidate manufacturing operations and distribution networks across Gujarat. Both companies are engaged in the TMT bar manufacturing business. The scheme remains conditional on statutory and regulatory clearances. The board approval marks the formal start of a process that will now move to regulators, exchanges, and stakeholder votes.

Share swap ratio and how it works

Under the proposed amalgamation, the share exchange ratio has been fixed at 75 equity shares of VMS TMT (face value INR 10 each) for every 100 equity shares of AUSL (face value INR 10 each), as on the record date. VMS TMT said the ratio is backed by a valuation report from a registered valuer and a fairness opinion from a SEBI-registered merchant banker. The merger consideration will be discharged on an arm’s length basis, as stated in the exchange filing. On the effective date of the scheme, AUSL will be dissolved without being wound up, and its equity shares will be extinguished. The ratio indicates a pure share-swap structure rather than a cash payout. Any change to the record date, implementation timeline, or final terms will depend on the approvals and directions issued during the process.

Why the companies say the merger is being done

VMS TMT said the merger is intended to unify the Kamdhenu brand presence in Gujarat and combine territorial strengths to eliminate fragmentation and enhance market reach. The integration plan includes consolidating complementary assets and optimising manufacturing capacities to achieve operational synergies and cost efficiencies. The company also referred to integrating assets including solar power facilities, indicating that the combined setup will include energy-related infrastructure already owned by one of the entities. The narrative from the company is focused on building a larger, more integrated steel manufacturing enterprise in the state. The merger is also positioned as a step to consolidate business operations that are currently split between the two entities. The final impact will depend on how quickly integration is executed after the scheme becomes effective.

Regulatory approvals and process checkpoints

The scheme requires approvals from the Securities and Exchange Board of India (SEBI), the National Company Law Tribunal (NCLT), BSE Limited, and the National Stock Exchange of India Limited (NSE). In addition, it will need approvals from the respective shareholders and creditors of the companies. VMS TMT’s filing also referenced the applicable SEBI circular dated January 30, 2026, for disclosures related to such transactions. The company stated that the transaction does not fall under related party transactions under the Ministry of Corporate Affairs General Circular No. 30/2014 because it is subject to NCLT sanction and Section 188 of the Companies Act, 2013 is not applicable. These approvals typically involve review of the scheme, valuation, fairness opinion, and stakeholder voting outcomes. Until those steps are completed, the merger remains a proposal.

Operating footprint in Gujarat and the earlier MoU

The proposed amalgamation comes against the backdrop of an MoU dated 16 May 2024 between VMS TMT and Aditya Ultra Steel. Under that arrangement, AUSL agreed to focus its TMT bar and allied products business operations on the Saurashtra and Kutch districts of Gujarat and not sell outside those areas. VMS TMT, in turn, agreed to concentrate its business operations in districts other than Saurashtra and Kutch in Gujarat. The merger proposal now seeks to bring the two operational footprints under one listed entity, which could simplify route-to-market decisions and unify distribution. The companies have described the combination as a way to remove fragmentation in the state market. The MoU details also highlight that the two entities were already coordinating territory-level operations before the amalgamation proposal.

Key financial snapshot from the disclosure

The disclosure shared headline numbers for assets and turnover for both companies. Converting the reported lakh figures into a single base unit of INR crore, AUSL reported total assets of INR 192.97 crore and turnover of INR 409.90 crore. VMS TMT reported total assets of INR 519.41 crore and turnover of INR 840.20 crore. A separate headline in the provided information indicated the merger is expected to create an entity with about INR 1,250 crore turnover, which broadly aligns with the two turnover numbers combined.

What it means for the Kamdhenu franchise structure

VMS TMT has been described as a franchisee unit of Kamdhenu Limited, producing Kamdhenu brand TMT bars under a franchise agreement. The merger rationale explicitly references strengthening Kamdhenu brand presence in Gujarat through a unified approach. The broader Kamdhenu group context in the provided material also includes Kamdhenu Limited’s acquisition, approved on June 17, 2024, of 2,11,000 equity shares of VMS TMT at INR 230 per share, amounting to INR 4.85 crore, representing 1.56% of shareholding post-acquisition. That disclosure stated the acquisition was not considered a related party transaction and was conducted at an arm’s length basis. While that acquisition is separate from the current scheme, it shows that the Kamdhenu-linked structure around VMS TMT has had documented transactions and disclosures in recent years. Any future brand and franchise alignment will still be subject to the terms of existing agreements and regulatory approvals for the merger.

Market impact: what can be said from disclosed facts

From the disclosed numbers, the most direct market-relevant takeaway is the scale of the combined turnover, which is indicated at around INR 1,250 crore based on the two companies’ turnover figures. The proposed share swap ratio sets expectations for equity issuance by VMS TMT to AUSL shareholders, although the final issued shares will depend on the record date shareholding and scheme mechanics. The company has also positioned the merger around capacity optimisation, distribution consolidation across Gujarat, and cost efficiencies, but it has not provided quantified synergy guidance in the provided text. The approval pathway is clearly defined: SEBI, NCLT, BSE, NSE, shareholders, and creditors. Until these approvals are secured and timelines are disclosed, investors typically track updates through exchange filings, scheme documents, and notices for shareholder or creditor meetings.

Context from VMS TMT’s recent public market journey

The provided information also included capital market background for VMS TMT, including an issue size of INR 148.5 crore and bidding dates of 17 Sep 2025 to 19 Sep 2025, with listing noted as 24 Sep 2025. It also stated the company’s name was changed to VMS TMT Limited upon conversion into a public limited company, with the fresh certificate of change of name issued on December 1, 2023 by the Registrar of Companies, Gujarat at Ahmedabad. Separately, the text noted total outstanding fund-based borrowings of INR 261.71 crore as of June 30, 2025, and that net proceeds from an offer were to be used towards repayment or prepayment of borrowings amounting to INR 115 crore, with the balance for general corporate purposes. These details provide context on how the company has funded operations and positioned itself since becoming publicly listed.

Conclusion

VMS TMT’s board approval starts the formal amalgamation process to merge Aditya Ultra Steel into the listed entity via a 75:100 share swap. The company is positioning the move around consolidating Gujarat operations and unifying the Kamdhenu brand footprint, with the scheme now awaiting approvals from SEBI, NCLT, stock exchanges, and stakeholders. The next confirmed milestones will be regulatory reviews and shareholder and creditor approvals, followed by implementation steps once the scheme becomes effective.