Haresh ShahThe Scheme of Merger by Absorption provides for the merger of Hinduja Leyland Finance Limited into NDL Ventures Limited pursuant to Sections 230 to 232 of the Companies Act, 2013. The scheme was approved by the respective Boards on 25 November 2025, with an Appointed Date of 1 April 2026.
Hinduja Leyland Finance Limited (HLFL) — The Transferor Company
Hinduja Leyland Finance Limited (HLFL or Transferor Company) was incorporated on 12 November 2008 under the Companies Act, 1956 in the state of Tamil Nadu. Its registered office is at Plot No. C-21, Tower C (1–3 Floors), G Block, Bandra Kurla Complex, Bandra East, Mumbai – 400051. HLFL was initially registered as a Systemically Important Non-Deposit Accepting Non-Banking Finance Company (NBFC-ND-SI) and was subsequently granted NBFC–Asset Finance Company (NBFC-AFC) status by the Reserve Bank of India (RBI) on 12 May 2014. The company is a subsidiary of Ashok Leyland Limited (ALL), which in turn is part of the broader Hinduja Group.
HLFL is primarily engaged in commercial vehicle financing and housing finance businesses. Its housing finance operations are carried out through a wholly-owned subsidiary, Hinduja Housing Finance Limited (HHFL). In addition, HLFL has nascent-stage operations in ancillary businesses, including:
- Gro Digital Logistics Limited — a transportation logistics services platform.
- Gaadi Mandi Digital Platforms Limited — an e-commerce platform for sale and purchase of repossessed vehicles.
- HLF Services Limited (HSL) — an associate company (~45.9% effective stake) engaged in manpower and support services.
The Non-Convertible Debentures (NCDs) of HLFL are listed on BSE Limited, making it a ‘high-value debt listed company’, though its equity shares are not listed on any stock exchange. As of September 30, 2025, HLFL’s paid-up equity share capital stood at ₹545.25 crore comprising 54.53 crore equity shares of ₹10 each, with promoters (Ashok Leyland and Hinduja Group entities) holding 73% and public/other shareholders holding 27%.
Key Financial Snapshot — HLFL (Standalone, ₹ Crore)
| Particulars | FY 2023-24 | FY 2024-25 | H1 FY 2025-26 |
| Revenue from Operations | 3,800+ | 4,473.3 | 2,818.9 |
| Profit After Tax | ~340 | 408.2 | 193.0 |
| Net Worth | ~6,800 | 7,299.2 | 8,149.5 |
| Paid-up Equity Capital | 535.4 | 545.3 | 545.3 |
| NCD Outstanding (approx.) | ~17,000 | ~18,000+ | ~19,000+ |
NDL Ventures Limited (NDL) — The Transferee Company
NDL Ventures Limited (NDL or transferee company) was incorporated as a public limited company on 18 July 1985 under the Companies Act, 1956 in the state of Maharashtra. Its registered office is at IN Centre, 49/50, MIDC, 12th Road, Andheri East, Mumbai – 400093.
The company has a long and winding corporate history, having undergone multiple name changes and business transformations:
| Year | Development |
| 1985 | Incorporated as Mitesh Mercantile & Financing Corporation |
| 1995 | Renamed Hinduja Finance Corporation Limited |
| 2001 | Renamed Hinduja TMT Limited |
| 2007 | Renamed Hinduja Ventures Limited (HVL) |
| 2022 | Renamed NXTDIGITAL Limited post-demerger of media business |
| 2022 | Renamed NDL Ventures Limited (current name) |
At its peak as Hinduja Ventures Limited, HVL was a diversified Hinduja Group holding company with interests in media & communications, real estate, treasury, and IT/ITES. However, a landmark demerger in 2022 fundamentally altered NDL’s character (described in Section 2). Post-demerger, NDL holds only a land parcel in Bengaluru and has no operating business. NDL’s equity shares are listed on BSE Limited and the National Stock Exchange of India (NSE). Promoters (Hinduja Group) hold 66.2% and the public holds 33.8%. NDL’s net worth as on 31 March 2025 was ₹60.1 crore, primarily comprising the fair value of its Bengaluru land asset.
Importantly, with effect from 27 October 2022, NDL amended its main object clause to enable it to carry on financial services business, positioning itself as the intended vehicle for the NBFC business of the Hinduja Group.
The Hinduja Group — Common Parentage
Both companies trace their ultimate parentage to the Hinduja Group, one of India’s oldest and largest conglomerates with origins in trading and subsequently diversifying into banking and finance, automotive, IT and BPO, healthcare, media, and infrastructure. The Group’s principal listed Indian entities include Ashok Leyland Limited (commercial vehicles), IndusInd Bank, and Hinduja Global Solutions.
Ashok Leyland Limited (ALL), a Hinduja Group flagship, is the principal promoter of HLFL. NDL Ventures Limited is directly held by various Hinduja Group entities. The proposed merger is therefore fundamentally an intra-group consolidation within the Hinduja ecosystem.
Past Merger & Demerger History
Both HLFL and NDL (in its earlier avatars) have been active participants in corporate restructuring. Understanding this history is essential to appreciate the current transaction in context.
Corporate History of NDL (formerly Hinduja Ventures Limited):
| Year | Transaction |
| 2007 | Demerger of IT/ITES (BPO) Business of Hinduja TMT Limited to HTMT Technologies Limited |
| 2011 | Merger of HTMT Telecom Private Limited (wholly-owned subsidiary) into HVL |
| 2015 | Merger of IDL Speciality Chemicals Limited (wholly-owned subsidiary) into HVL |
| 2017 | Demerger of HITS Business Undertaking from Grant Investrade Ltd. (WoS of HVL) into IndusInd Media & Communications Ltd. |
| 2018 | Merger of Grant Investrade Ltd. (WoS of HVL) into HVL |
| 2019 | Demerger of Media & Communications Undertaking from IndusInd Media & Communications Ltd. (IMCL) into HVL — creating NXT Digital; HVL became an operating media company |
| 2022 | Landmark demerger: entire Media & Communications Undertaking of NDL (then NXTDIGITAL) demerged into Hinduja Global Solutions Limited (HGSL). NDL became a shell with only a Bengaluru land parcel. Renamed NDL Ventures Limited |
| 2025 | Scheme of Merger by Absorption of HLFL into NDL announced (November 25, 2025) |
The 2022 demerger of the media business from NDL into HGSL is particularly significant. By shedding its entire media and communications operations — which had been struggling financially for years — NDL was effectively hollowed out and simultaneously had its object clause amended to pivot to financial services. This restructuring was a deliberate preparatory step to receive the NBFC business of HLFL. The current merger, therefore, represents the culmination of a multi-year strategic repositioning of NDL as the Hinduja Group’s listed financial services vehicle.
Corporate History of HLFL:
HLFL was incorporated in 2008 as part of a joint venture between the Hinduja Group and Ashok Leyland to create a captive vehicle finance arm. It received NBFC-AFC status from the RBI in 2014. Over the years, HLFL has grown into one of India’s significant commercial vehicle (CV) finance companies with a pan-India presence and a substantial loan book supported by listed NCDs.
Transaction Overview — Scheme of Merger by Absorption
The Board of Directors of NDL Ventures Limited (NDL) and Hinduja Leyland Finance Limited (HLFL) have proposed a “Merger by Absorption” that will see the business operations of HLFL consolidated into NDL. This transaction marks a significant pivot for NDL, transitioning it from a company with residual real estate assets into a core player in India’s booming financial services sector.
The primary objective of this merger is to create a more robust and streamlined entity. Key strategic reasons include:
- Consolidation of Group Resources: Combining the financial strengths of both entities to enhance the capital base of the resultant company.
- Operational Synergies: Reducing administrative overheads and overlapping corporate functions to improve overall efficiency.
- Shareholder Value: Aiming to provide better returns to shareholders by creating a more diversified and financially stable listed entity.
Consideration and Valuation Methodologies
Two independent registered valuers — M/s SSPA & Co., Chartered Accountants and KPMG Valuation Services LLP were appointed to determine the equity share exchange ratio. Both valuers independently recommended identical ratios, which were confirmed as fair by Motilal Oswal Investment Advisors Limited as the independent merchant banker.
Equity Share Exchange Ratio
|
NCD Exchange Ratio
|
Given the very different nature of the two companies — HLFL being an operating NBFC and NDL being a near-shell entity — the valuers adopted distinct and asymmetric methodologies:
For HLFL:
- Comparable Companies Multiple (CCM) Method (50% weight): P/BV multiples of comparable listed CV finance companies (Mahindra & Mahindra Financial Services, Shriram Finance, Sundaram Finance, IndoStar Capital). Q1 multiple of 1.5x applied to the standalone net worth of ₹7,621.5 crore.
- Comparable Transaction Method (CoTrans) (50% weight): Preferential allotment at ₹200 per share (March 2025, 1 crore shares to Ashok Leyland) used as a reference transaction.
- Sum-of-Parts: HLFL valued incorporating standalone operations (₹11,432.2 crore) + HHFL stake (₹3,478.6 crore) + HSL stake (₹44.1 crore) + Gro Digital (₹13.6 crore) + Gaadi Mandi (₹0.1 crore) + ESOP proceeds (₹25.4 crore) = Equity Value ~₹14,994 crore. Per-share value: ₹237.
For NDL:
- Market Price Method (100% weight): 10-day VWAP (₹94.7) and 90-day VWAP (₹89.0) as per SEBI ICDR Regulations, with the higher taken. Per-share value: ₹94.7.
- NAV Method (reference only): Net asset value of ₹69.1 per share after fair valuing the Bengaluru land parcel (independent real estate valuation by Anmol Sekhri Consultants Pvt. Ltd.).
| Company | Method Applied | Value per Share (₹) | Weight |
| HLFL | Comparable Companies (P/BV) | 274.0 | 50% |
| HLFL | Comparable Transaction (CoTrans) | 200.0 | 50% |
| HLFL | Weighted Average | 237.0 | 100% |
| NDL | Market Price (10-day VWAP) | 94.7 | 100% |
| NDL | Net Asset Value (reference) | 69.1 | 0% |
| Exchange Ratio | 25 NDL : 10 HLFL |
Shareholding Pattern
Following the merger, HLFL will cease to exist as a separate legal entity, and all its assets, liabilities, employees, contracts, NCDs, and regulatory registrations will vest in NDL.
- All promoters join NDL’s promoter group; Ashok Leyland becomes a major promoter of NDL.
- HLFL public shareholders gain listed NDL shares; first liquidity event for HLFL equity investors.
- ESOPs excluded from paid-up; if exercised, holders get 2.5× NDL shares per HLFL option.
NDL equity base expands ~41× from pre-merger; HLFL ceases to exist as a separate legal entity.
Strategic Rationale — Beyond the Stated Reasons
The official documents cite consolidation of financial services, simplification of corporate structure, operational streamlining, access to listed platforms, and alignment with group reorganization as the rationale. However, a deeper examination reveals a richer set of strategic and structural imperatives:
The Listed-Shell Play: A Vehicle Ready for an NBFC
NDL’s trajectory since 2022 — shedding its media operations, amending its objects clause for financial services, retaining its stock exchange listings — was not incidental. It was deliberate preparation. Creating a new listed NBFC from scratch would require significant time (RBI registration, SEBI listing approvals, minimum promoter holding compliance) and expense. NDL offered a ready-made listed shell with a clean balance sheet, legitimate promoter shareholding structure, and a compliant listed entity framework. The merger is effectively a reverse-insertion of an operating NBFC business into a listed shell, far more efficient than a traditional IPO or fresh listing route.
Unlocking Capital Markets Access for an Equity-Hungry NBFC
HLFL, despite being a large NBFC with a net worth of over ₹8,000 crore, has never had its equity listed. As a debt-heavy financial intermediary, its growth is capital-constrained — every incremental loan requires fresh equity capital to maintain regulatory capital adequacy ratios (CAR). Listing through this merger allows HLFL’s business to tap public equity markets, issue QIPs, rights issues, or follow-on offerings, and use stock as acquisition currency — none of which were available to it as an unlisted entity.
Promoter Holdings Rationalisation and Ashok Leyland’s Balance Sheet
Ashok Leyland Limited (ALL), the primary promoter of HLFL, holds a large investment in HLFL in its books. As a commercial vehicle manufacturer, ALL’s core business valuation suffers from the market’s tendency to ‘through the balance sheet’ discount its investment in HLFL. By merging HLFL into the separately listed NDL, ALL’s investment in HLFL converts into a listed stake in NDL — potentially unlocking value and providing ALL the flexibility to monetise or rebalance this stake over time in the secondary market. This deconglomeration benefit is not stated in the scheme documents but is a significant implicit rationale.
Resolving the Unlisted Minority Shareholder Conundrum
With 27% of HLFL’s equity held by public/non-promoter shareholders (approximately 14.77 crore shares), these shareholders had no liquid exit from their investment as HLFL equity was unlisted. The merger provides these shareholders with liquid, exchange-tradable NDL shares — effectively providing them an exit/liquidity mechanism that was previously unavailable. The 25:10 exchange ratio and the fairness opinion from Motilal Oswal serve to validate that these shareholders are not disadvantaged.
NCD Holder Continuity: A Regulatory Masterstroke
HLFL had approximately ₹19,000+ crore of listed NCDs outstanding as of September 2025, held by 5,177 holders across banks, mutual funds, insurance companies, pension funds, and retail investors. A liquidation or restructuring of HLFL would have caused immediate credit events on these instruments. The 1:1 NCD exchange ratio, with all terms preserved and credit ratings maintained at AA+, elegantly transfers this entire debt obligation to NDL without triggering any event of default, rating downgrade, or bondholder protection mechanism. This is a masterstroke of structuring that allows a ₹19,000+ crore debt book to migrate seamlessly.
RBI Regulatory Positioning
HLFL operates as an NBFC-AFC under the RBI’s regulatory framework. Post-merger, NDL will inherit HLFL’s NBFC registration and regulatory standing. This is significant because obtaining a fresh NBFC license, particularly for a large-scale business, is subject to the RBI’s evolving policy on new NBFC registrations. The merger effectively transfers an existing, well-established regulatory franchise rather than requiring a fresh application — a valuable asset in India’s tightening NBFC regulatory environment.
Timing — Post-Peak NPA Cycle
The commercial vehicle finance sector experienced significant stress during COVID-19 (FY 2020–22) with elevated NPAs and collection challenges. HLFL’s NPA profile has normalised as the CV sector recovered. The merger is timed when HLFL’s financials are at a cyclical high — a PAT of ₹408 crore in FY25 and improving net worth. Listing at a peak earnings cycle maximises the valuation for HLFL’s existing shareholders.
Income Tax Implications
For the merger to qualify as a tax-neutral amalgamation under the Income Tax Act, 1961 (ITA), it must satisfy the conditions prescribed under Section 2(1B):
- All assets and liabilities of the amalgamating company (HLFL) must be transferred to the amalgamated company (NDL).
- Shareholders holding not less than 75% in value of shares of the amalgamating company must become shareholders of the amalgamated company.
- The consideration for the amalgamation must be shares in the amalgamated company (not cash).
This merger satisfies all three conditions — all assets and liabilities of HLFL vest in NDL, HLFL shareholders receive only NDL equity shares (no cash), and given the 73% promoter holding plus the public shareholders, well over 75% of HLFL shareholders will become NDL shareholders. Accordingly, the merger qualifies as an ‘amalgamation’ under Section 2(1B) ITA.
Tax in Hands of HLFL Shareholders
Under Section 47(vii) of the ITA, transfer of shares of an amalgamating company in exchange for shares of the amalgamated company in a qualifying amalgamation is not treated as a transfer for capital gains purposes. Therefore, HLFL equity shareholders will not have any capital gains tax liability upon receiving NDL shares in exchange for their HLFL shares. The cost of acquisition and holding period of the original HLFL shares will be carried forward to the NDL shares received.
Tax in Hands of NDL (Transferee)
Section 72A of the ITA allows the amalgamated company to carry forward and set off the accumulated business losses and unabsorbed depreciation of the amalgamating company, subject to conditions including that the amalgamated company must hold at least 75% of the book value of fixed assets of the amalgamating company for 5 years. HLFL, being a profitable NBFC, does not appear to have material unabsorbed losses; accordingly, Section 72A benefits may be limited in this case.
Under Section 35D read with Section 35DD, NDL can claim amortisation of merger-related expenditure over 5 years. The accumulated depreciation on fixed assets of HLFL will be assumed by NDL at book value.
GST and Other Indirect Tax Aspects
The merger is effected under a court-sanctioned scheme under the Companies Act, 2013 and accordingly, the transfer of business as a going concern is generally exempt from GST under Schedule II Entry 2(f) read with the GST Act. No GST is expected to be payable on the transfer of HLFL’s business to NDL. HLFL’s pending input tax credits and GST registrations will need to be amended/migrated to NDL.
Stamp Duty Implications
This is one of the most significant tax aspects of large mergers in India. Under Article 25 of the Indian Stamp Act, 1899 (and state stamp duty laws), merger/amalgamation orders may attract ad valorem stamp duty on the market value or consideration of assets being transferred.
The assets of HLFL — which include a loan book of over ₹40,000+ crore, fixed assets, investments, and other assets — are being vested in NDL. In many Indian states, this vesting can trigger stamp duty. Key considerations include:
- Under the Maharashtra Stamp Act (applicable as both companies are registered in Maharashtra), amalgamation orders of the High Court/NCLT attract stamp duty. However, most states have rationalised this — Maharashtra levies duty at 0.7% of the higher of the consideration value or market value of the property, subject to a cap.
- The Appointed Date (1 April 2026) is critical — stamp duty is generally computed on the value of assets as at the Appointed Date. Given HLFL’s massive loan book, stamp duty on financial assets (loans/receivables) may be a significant cost unless specifically exempted.
- Immovable property transfers: HLFL, through its subsidiaries and ancillary businesses (Gro Digital, Gaadi Mandi), may hold some immovable property. Any such transfers will attract stamp duty at applicable state rates.
- Mortgage/charge-related stamp duty: HLFL’s secured borrowings are backed by charges on assets. When these charges are assumed by NDL, fresh charge registration documents may need to be executed, potentially attracting stamp duty.
- NDL should explore whether the NCLT order sanctioning the scheme can specifically address stamp duty implications, as courts have in some cases held that duty is payable on the NCLT order itself and not on each individual asset transfer.
Some Unique Features of the Transaction
- A ₹8,000+ Crore NBFC Merging into a ₹60 Crore Shell :
Perhaps the most striking feature is the extreme size asymmetry. HLFL has a net worth of over ₹8,149.5 crore (September 2025) and a loan book exceeding ₹40,000 crore — dwarfing NDL’s modest ₹60 crore net worth. Technically, the smaller entity (NDL, as transferee) is absorbing the vastly larger HLFL (as transferor). This is a reverse merger in economic substance even though legally it is structured as HLFL merging into NDL to leverage NDL’s listed status. Post-merger, NDL’s character and business will be entirely that of HLFL — the listed entity shell is simply the surviving corporate vehicle. - Massive NCD Liability Migration — 63 Series of NCDs
The scheme involves the migration of 63 series of NCDs issued by HLFL, aggregating approximately ₹19,000+ crore in outstanding amount across 5,177 NCD holders, all carrying AA+ credit ratings (except a few rated AA), at coupon rates ranging from 7.89% to 9.75% per annum. Few Indian mergers have involved the simultaneous migration of such a large and diverse NCD book. Statutory auditors (S K Patodia & Associates LLP) certified NDL’s capability to service its debt obligations post-merger. An exit option will be provided to NCD holders who vote against the resolution approving the Scheme. This option will be guided by the price and terms specified in the respective information memorandum and applicable laws. - Promoter Shareholding Dilution — A Feature, not a Bug
Post-merger, the Hinduja Group’s effective ownership in the enlarged NDL will be diluted (by 2% circa) relative to their current 73% in HLFL, as HLFL’s 27% public shareholders receive new NDL shares. This dilution is designed and welcomed — it creates a larger public float in the resulting entity and may improve liquidity and index eligibility of NDL’s stock. The group appears comfortable with a reduced percentage holding in a much larger and more valuable entity. - The Bengaluru Land Parcel — A Hidden Asset
Post-merger, the combined NDL will inherit the Bengaluru land parcel currently sitting in NDL. While NDL’s market value (₹94.7 per share) already prices in some portion of this land value above its NAV (₹69.1 per share), the land parcel represents an optionality for the enlarged entity — it could be used for developing HLFL’s corporate infrastructure, leased, or monetised depending on business needs.
Conclusion
The merger of Hinduja Leyland Finance Limited into NDL Ventures Limited is a landmark transaction in Indian NBFC and capital markets history. It is far more than a straightforward consolidation — it represents the culmination of a decade-long strategic restructuring of the Hinduja Group’s financial services portfolio, the unlocking of a listed platform for one of India’s significant vehicle finance NBFCs, and a sophisticated solution to multiple corporate objectives including equity listing, NCD continuity, minority shareholder liquidity, and group balance sheet rationalisation.
The KPMG valuation report reveals that this transaction was internally codenamed ‘Project Atlantis’ — a fitting name for what is essentially a submerged (unlisted) NBFC rising to the surface (public markets). The transaction is structurally elegant: a profitable, growing NBFC with ₹8,000+ crore of net worth and ₹19,000+ crore of listed debt is being folded into a nearly dormant listed shell that has been purpose-built to receive it.
The proposed merger is a sophisticated corporate restructuring designed to achieve a dual objective: providing the Transferor Company with an immediate listed platform while optimizing the high-value real estate assets held by the Transferee Company. This transaction effectively functions as a “reverse merger” style listing, allowing HLFL’s significant operating scale and robust cash flows to be integrated into a listed framework, thereby simplifying the Hinduja Group’s capital architecture and enhancing liquidity for stakeholders.
If the NCLT approves the scheme and regulatory clearances are obtained, the resulting NDL — essentially HLFL in a listed avatar — will emerge as one of India’s few large listed NBFC-AFCs focused on commercial vehicle financing, with the ability to raise equity capital from public markets for the first time, potentially catalysing its next phase of growth.
[su_note note_color=”#83ff7d” radius=”5″]Please feel free to share/retweet the article and as always you can write down in the comment box below for anything related to the article. We would love to answer.[/su_note]
