Description

NCLT Mumbai Bench approved resolution plan for Garodia Chemicals Ltd involving extinguishment of promoter shares and capital reduction for public shareholders effective December 10, 2025.

Summary

BSE has announced the suspension of trading in Garodia Chemicals Ltd (Scrip Code: 530161) effective December 10, 2025, following a resolution plan approved by the National Company Law Tribunal (NCLT), Mumbai Bench. The plan involves complete extinguishment of promoter shares (37,28,800 equity shares representing 51.79% stake) without payment, and a significant capital reduction for public shareholders with a 13:1 share consolidation and face value reduction from Rs. 10 to Re. 1.

Key Points

  • Trading suspension effective from December 10, 2025 (Settlement No. DR-774/2025-2026)
  • Record date set as December 10, 2025
  • Complete extinguishment of 37,28,800 promoter equity shares (51.79% shareholding) without any payment
  • Public shareholders will receive 1 equity share for every 13 existing shares held
  • Face value of public shareholder equity reduced from Rs. 10 to Re. 1
  • Resolution plan approved by Hon’ble NCLT, Mumbai Bench
  • Trading members advised not to deal in equity shares from the specified date

Regulatory Changes

The NCLT Mumbai Bench has approved a Base Resolution Plan that fundamentally restructures the share capital of Garodia Chemicals Ltd. This judicial order authorizes:

  1. Complete extinguishment and reduction of promoter equity shares without compensation
  2. Mandatory share consolidation and capital reconstitution for public shareholders
  3. Reduction in par value of equity shares from Rs. 10 to Re. 1

Compliance Requirements

  • Trading Members: Must not deal in equity shares of Garodia Chemicals Ltd with effect from December 10, 2025
  • Company: Must implement the capital reduction as per NCLT-approved resolution plan
  • Public Shareholders: Will undergo automatic share consolidation (13:1 ratio) and face value reduction
  • All Market Participants: Must note the trading suspension and record date for capital restructuring

Important Dates

  • Notice Date: December 5, 2025
  • Record Date: December 10, 2025
  • Trading Suspension Date: December 10, 2025
  • Settlement Number: DR-774/2025-2026

Impact Assessment

High Severity and High Impact Event

This resolution plan represents a severe corporate restructuring with significant implications:

For Promoters: Complete loss of 51.79% equity stake (37,28,800 shares) without any compensation, indicating financial distress or insolvency resolution.

For Public Shareholders: Massive dilution through 13:1 reverse stock split, reducing holdings by approximately 92.3%. Combined with face value reduction from Rs. 10 to Re. 1, this suggests substantial capital write-down.

Market Impact: Trading suspension indicates the stock will be halted from secondary market trading, preventing liquidity and price discovery. The NCLT-approved restructuring suggests the company was likely undergoing insolvency or debt resolution proceedings.

Regulatory Significance: This is a court-mandated capital restructuring under insolvency law, representing one of the most severe corporate actions possible, fundamentally altering the ownership structure and capital base of the company.

Impact Justification

Major corporate restructuring involving complete extinguishment of 51.79% promoter shareholding and significant dilution of public shareholders (13:1 consolidation), requiring trading suspension.