In a move to separate the Paint Business from its Core Steel Business, Kamdhenu Limited announced Scheme of Arrangement (“Scheme”) whereby, it will demerger its Paint Business to the newly incorporated step-down wholly-owned subsidiary of the Kamdhenu Limited.

The Scheme inter-alia also provides for amalgamation of Promoter entities (which together holds substantial stake in Kamdhenu Limited) in Kamdhenu Limited thereby collapsing the inter-company holding structure.

Though apparently, the transaction looks simple, the consideration, transaction structure and re-organisation of share capital post-transaction makes it complicated.

Kamdhenu Limited (“the Transferee Company/Demerged Company”) is engaged in manufacturing, branding, marketing and distribution of KAMDHENU brand products like Steel TMT bars, decorative paints and allied products. Thus, the Demerged Company has two distinct business segments-Steel Division and Paint Division.

In the Steel Business, Kamdhenu has its own TMT manufacturing plant at Bhiwandi from where it is catering to the market of Delhi and NCR. The rest of India is being catered by the Franchisee Network of the Company. Kamdhenu TMT is one of the largest selling TMT brands in India, in the retail segment.

In the Paint Business, the Demerged Company is into decorative paint segment wherein it manufactures all types of paints including interior, exterior, emulsions, textures, designer paints and all varieties of paints, competing with the leading paint manufacturers in India. The Company is also outsourcing Paint Products to meet the Market Demand.

Kamdhenu Concast Limited (Transferor Company 1) is an unlisted closely held company. Presently, Transferor Company 1 is engaged in the marketing and branding of steel and allied products and other related activities. The Transferor Company 1 has also made investments in securities (including investment in Kamdhenu Ltd).

Kamdhenu Overseas Limited (Transferor Company 2) is an unlisted closely held company. Presently, the Transferor Company 2 is engaged in purchase, sale and trading of M .S. bar and other iron & steel products and other related activities. The Transferor Company No. 2 has also made investments in securities (including investment in Kamdhenu Ltd).

Kamdhenu Paint Industries Limited (Transferor Company 3) is an unlisted closely held company. The Transferor Company 3 was incorporated to carry on the manufacturing of paint and other allied products. The Transferor Company 3 has also made investments in securities (including investment in Kamdhenu Ltd).

Kamdhenu Infradevelopers Limited (Transferor Company 4) is an unlisted closely held company. Presently, the Transferor Company 4 is engaged in agency business and other related activities. The Transferor Company 4 has also made investments in securities (including investment in Kamdhenu Ltd).

Kamdhenu Nutrient Private Limited (Transferor Company 5) is an unlisted closely held company. Presently, the Transferor Company 5 is engaged in agency business and other related activities. The Transferor Company 5 has also made investments in securities (including investment in Kamdhenu Ltd).

Kay2 Steel Limited (Transferor Company 6) is an unlisted closely held company. Presently, the Transferor Company 6 is engaged in providing business support services and other related activities. The Transferor Company 6 has also made investments in securities (including investment in Kamdhenu Ltd).

Tiptop Promoters Private Limited (Transferor Company 7) is an unlisted closely held company. Presently, the Transferor Company 7 is engaged in agency business and other related activities. The Transferor Company 7 has also made investments in securities (including investment in group companies).

Kamdhenu Ventures Limited (The Resulting Company 1) is the wholly-owned subsidiary of the Transferee Company. It has been recently incorporated for the purpose of the proposed Scheme of Arrangement.

Kamdhenu Colour and Coating Limited (The Resulting Company 2) is the wholly-owned subsidiary of the Resulting Company 1. It has been recently incorporated for the purpose of the proposed Scheme of Arrangement.

The Transaction

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