NCLT Mumbai Grants Approval for ₹203 Crore Preference Share Capital Reduction: In re DEXIT Global Limited

Overview of the Matter

The National Company Law Tribunal (NCLT), Mumbai Bench, in C.P. No. 70/MB/2025 — In re DEXIT Global Limited — sanctioned a substantial reduction of preference share capital aggregating to ₹203 crore. The petition was moved under Section 66 of the Companies Act, 2013, read alongside the National Company Law Tribunal (Procedure for Reduction of Share Capital of Company) Rules, 2016. The Tribunal, upon thorough examination of the facts, documents, and statutory compliance, found the proposed reduction to be just, equitable, and consistent with the law.

Background and Material Facts

DEXIT Global Limited (the petitioner company) approached the NCLT Mumbai seeking judicial confirmation of a special resolution passed by its shareholders, authorising a reduction of its preference share capital. The reduction encompassed two categories of preference shares:

  • 1,00,00,000 — 7% Cumulative Redeemable Preference Shares of ₹100 each, fully paid-up
  • 1,03,00,000 — Series A, 7%, seven-year, cumulative, non-participating and optionally convertible redeemable preference shares of ₹100 each, fully paid-up

Together, the above amounted to a total preference share capital of ₹203,00,00,000 (Rupees Two Hundred and Three Crore), and the consideration proposed to be paid to the preference shareholders did not exceed this figure.

Corporate Authorization

The company's Article 72 of the Articles of Association expressly empowered it to undertake share capital reduction. The relevant extract reads:

"Subject to the provision of Section 66 of the Act; the Company may from time to time, by special resolution, reduce its share capital in any way authorised by law and in particular may pay off any paid up share capital upon the footing that it may be called up again or otherwise and may and if and so far as is necessary alter its Memorandum of Association by reducing the amount of its share capital and of its share accordingly."

Procedural Timeline

The procedural sequence in this matter was as follows:

  1. The Board of Directors approved the capital reduction proposal vide Board Resolution dated 01.03.2025.
  2. An Extraordinary General Meeting (EGM) was convened on 03.03.2025, at which equity shareholders and preference shareholders unanimously passed the special resolution for capital reduction.
  3. The petition was filed before the NCLT Mumbai, and the first motion order was issued by the Tribunal on 07.04.2025.
  4. The petitioner served notices upon secured and unsecured creditors and published notices in Form No. RSC-4 as required under the National Company Law Tribunal (Procedure for Reduction of Share Capital of Company) Rules, 2016.
  5. A Service Affidavit dated 09.05.2025 was filed confirming due compliance with the first motion order.
  6. The Regional Director (Western Region) filed a report dated 25.07.2025 raising various observations.
  7. The petitioner responded through an Affidavit-in-Reply dated 31.07.2025.
  8. Following further queries from the Tribunal, an Additional Affidavit dated 20.04.2026 was filed, along with a copy of the Share Purchase Agreement dated 31.01.2025 between NSE Investment Limited, CL Educate Limited, and the petitioner company.

Rationale Behind the Proposed Capital Reduction

The petitioner provided the following commercial and operational justification for the proposed reduction: