Mumbai-based Kanakia Group plans to demerge its real estate division from other businesses as part of a broader streamlining exercise it believes will help attract investors.
Doing so would also provide more flexibility in accessing capital for each of the businesses, lawyers involved said.
The group has approached the Mumbai bench of the National Company Law Tribunal (NCLT) to seek approval for the demerger of Kanakia Spaces Realty Pvt Ltd and Transparent Developers Pvt Ltd. This restructuring is aimed at segregating the group’s real estate activities from its other ventures.
The companies, through their legal counsel, have told the NCLT the scheme is anticipated to provide greater operational and financial flexibility to the companies in raising capital. They emphasised that the proposed structure would enhance access to funding by making the investment process more efficient and appealing to a broader pool of potential investors.
During the recent hearing, the division bench of Justice V.G. Bisht and technical member Prabhat Kumar directed the companies to submit additional documents before the next date of hearing.
These include a list of contingent liabilities, details of any pending legal proceedings against both companies, and comprehensive information regarding letters of credit, such as sanctioned amounts, amounts utilised, and margin money furnished in relation to those credits.
“The first applicant company (Kanakia Spaces Realty) has received consents in the form of affidavits from its unsecured creditors…The majority of the creditors have given consent for approval of the scheme,” said a lawyer for the Kanakia Group.
Kanakia Group declined to comment.
Corporate restructurings like demergers are increasingly being adopted by Indian businesses to unlock value and sharpen their strategic focus. By separating distinct verticals, companies can present a clearer picture of their business fundamentals to investors and lenders, often resulting in better valuations and targeted capital allocation.
Doing so would also provide more flexibility in accessing capital for each of the businesses, lawyers involved said.
The group has approached the Mumbai bench of the National Company Law Tribunal (NCLT) to seek approval for the demerger of Kanakia Spaces Realty Pvt Ltd and Transparent Developers Pvt Ltd. This restructuring is aimed at segregating the group’s real estate activities from its other ventures.
The companies, through their legal counsel, have told the NCLT the scheme is anticipated to provide greater operational and financial flexibility to the companies in raising capital. They emphasised that the proposed structure would enhance access to funding by making the investment process more efficient and appealing to a broader pool of potential investors.
During the recent hearing, the division bench of Justice V.G. Bisht and technical member Prabhat Kumar directed the companies to submit additional documents before the next date of hearing.
These include a list of contingent liabilities, details of any pending legal proceedings against both companies, and comprehensive information regarding letters of credit, such as sanctioned amounts, amounts utilised, and margin money furnished in relation to those credits.
“The first applicant company (Kanakia Spaces Realty) has received consents in the form of affidavits from its unsecured creditors…The majority of the creditors have given consent for approval of the scheme,” said a lawyer for the Kanakia Group.
Kanakia Group declined to comment.
Corporate restructurings like demergers are increasingly being adopted by Indian businesses to unlock value and sharpen their strategic focus. By separating distinct verticals, companies can present a clearer picture of their business fundamentals to investors and lenders, often resulting in better valuations and targeted capital allocation.
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