NCLT Chennai orders convening of meetings in Renault Nissan Automotive demerger scheme
Background of the composite scheme
The National Company Law Tribunal, Chennai Bench, dealt with a Company Application filed jointly by Renault Nissan Automotive India Private Limited (First Applicant / Demerged Company) and Renault India Powertrain Private Limited (Second Applicant / Resulting Company), together with their shareholders. The application was moved under Sections 230-232 of the Companies Act, 2013, read with the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016, seeking directions in relation to a Composite Scheme of Arrangement.
Under this Scheme, the Powertrain Manufacturing Business housed in the Demerged Company is proposed to be demerged, transferred and vested into the Resulting Company as a going concern. The Remaining Business of the Demerged Company, including all other assets, investments, liabilities and obligations, is to continue with the Demerged Company without interruption.
As consideration for the demerger, the Scheme stipulates that the shareholders of the Demerged Company will receive 15 equity shares of the Resulting Company of face value INR 10 each for every 1,000 equity shares of INR 10 each held in the Demerged Company.
The Tribunal examined the Scheme’s intent, documentary support and compliance with statutory requirements before directing convening of meetings of specified classes of shareholders and creditors.
Corporate profile and financial position of the Demerged Company
Objects and incorporation details
The First Applicant, Renault Nissan Automotive India Private Limited, is a private limited company incorporated on 25.09.2007 under the provisions of the Companies Act, 1956. Its main objects, as set out in Clause 3 of its Memorandum of Association and captured in the application, broadly include:
- Engaging in the design, engineering, manufacture, assembly, improvement, development, purchase, sale, export and import of all forms of automotive vehicles, engines, parts, components, spares and accessories.
- Providing research, development, technical, engineering, management and consultancy services in connection with the automotive industry, including services relating to design, analysis, trend monitoring, and improvement of automotive products and processes.
- Offering a wide array of support services such as infrastructure and business support, design and decoration, after-sales and repair services, training, catering, security, warehousing, storage, transportation, cargo handling, IT and networking services, database management, event management, sales promotion, general contracting, financial leasing and temporary letting of surplus premises.
Share capital structure
As on 28.04.2026, the authorised and paid-up share capital of the Demerged Company is as follows:
Authorised share capital
- 630,00,00,000 equity shares of INR 10 each – INR 63,00,00,00,000
- 155,00,00,000 preference shares of INR 10 each – INR 15,50,00,00,000
Issued, subscribed and paid-up share capital
- 623,43,84,871 equity shares of INR 10 each – INR 62,34,38,48,710
The Memorandum and Articles of Association were placed on record as part of the application to demonstrate corporate capacity to undertake the Scheme.
Financial position
The Demerged Company filed its audited financial statements for the year ended 31.03.2025 and unaudited financial statements as on 28.02.2026. A summarized snapshot of its financials as on 28.02.2026 is as under:
- Net worth: INR 5,533,77,20,817/-
- Turnover (Gross Sales): INR 10,188,06,84,312/-
- Current Assets: INR 5,184,38,20,205/-
- Non-Current Assets: INR 5,464,94,92,164/-
These figures were relied on to support the feasibility and financial soundness of the proposed demerger.
Corporate profile and financial position of the Resulting Company
Objects and incorporation details
The Second Applicant, Renault India Powertrain Private Limited, is a private limited company incorporated on 06.04.2026 under the Companies Act, 2013. Its object clause (Clause III of the Memorandum of Association) reflects a focused mandate around powertrain-related activities. The key object categories are:
Carrying on the business of designing, engineering, producing, assembling, equipping, manufacturing, improving, developing, buying, selling, reselling, exporting, importing, distributing, marketing and maintaining all types of automotive powertrains, engines, components, spares and accessories.
Providing services connected with research, development, analysis and monitoring of designs and trends pertaining to powertrains, engines, automobile parts and accessories, along with engineering, technical, management, consultancy, advisory, infrastructural and business support services; and allied areas such as repair, after-sales, training, catering, security, warehousing, logistics, IT systems and more.
Manufacturing, fabricating, assembling, importing, exporting and dealing in automobile parts and components for all varieties of motor vehicles including two-wheelers, passenger vehicles, commercial vehicles, buses, trucks, tractors, motor cycles, and electric & hybrid vehicles.
Share capital structure
As on 28.04.2026, the Resulting Company has a relatively simple capital structure, reflecting its recent incorporation:
Authorised share capital
- 10,000 equity shares of INR 10 each – INR 1,00,000
Issued, subscribed and paid-up share capital
- 10,000 equity shares of INR 10 each – INR 1,00,000
Financial position
Given that the Resulting Company was incorporated only on 06.04.2026, its unaudited financial statements as on 28.04.2026 reflect early-stage figures:
- Net worth: INR 1,00,000/-
- Turnover (Gross Sales): INR 0
- Current Assets: INR 1,00,000/-
- Non-Current Assets: INR 0
- Current Liabilities: INR 0
- Non-Current Liabilities: INR 0
This confirms that, at the relevant date, the Resulting Company was primarily a shell entity intended to receive the Powertrain Manufacturing Business under the Scheme.
Board approval and Scheme rationale
Board resolutions approving the Scheme
The respective Boards of Directors of the Demerged Company and the Resulting Company passed resolutions in separate meetings held in 04.2026, approving the Composite Scheme of Arrangement. Copies of these Board resolutions were produced before the Tribunal, evidencing corporate approval at the Board level for proceeding under Sections 230-232.
Strategic and operational objectives of the demerger
Clause C of the Scheme sets out the detailed rationale for the proposed demerger.