NCLT Mumbai Approves Vakrangee Ltd Demerger

NCLT Mumbai Approves Vakrangee Ltd Demerger

The National Company Law Tribunal, Mumbai Bench (in short NCLT) approved the creation of two separate listed entities viz. Vakrangee and VL EGovernance and IT Solutions.

The division judges bench comprising of Justice P.N. Deshmukh (Judicial Member and Mr. Shyam Babu Gautam (Technical Member) were hearing an application filed under Sections 230 to 232 read with Section 66 and other applicable provision of the Companies Act, 2013 (in short Act). The scheme presented before the NCLT was an Arrangement for demerger and transfer of demerged undertaking i.e., EGovernance & IT/ITES Business (hereinafter referred to as "Demerged Undertaking") of Vakrangee Limited (hereinafter referred to as "the Demerged Company") into VL E-Governance & IT Solutions Limited (hereinafter referred to "the Resulting Company") and their respective shareholders.

The Scheme of Arrangement provided for the Demerger of the E-Governance & IT/ITES Business of the Demerged Company and vesting of the same into the Resulting Company, and the consequent discharge of consideration by the Resulting Company, pursuant to the relevant provisions of the Companies Act 2013.

It was reported that Vakrangee Limited- the Demerged Company has two business divisions viz. Vakrangee Kendra Business and E-Governance & IT/ITES Business. In its application it was stated that the VL E-Governance & IT Solutions Limited- Resulting Company was inter alia engaged in the business of providing facilitation services between service providers and end users of services to render government/non-governmental services, including but not limited to government services such as Aadhaar Card (UIDAI), Print & Data Management Services., IT/ITES related procurement management services facilitate utility services, any other governmental services to promote general wellbeing of the public at large and other support services.

Incorporated in 1990, Vakrangee has emerged as one of India's largest Last Mile Distribution Platform with a Physical as well as Digital Eco-system in place with a PAN INDIA Presence and delivering real-time banking & Financial Services, ATM, insurance, e-governance, ecommerce (including Healthcare services) and logistics services to the unserved rural, semiurban, and urban markets and enabling Indians to benefit from financial, social and digital inclusion.

The Tribunal by its order directed the Company to convene a meeting of its equity shareholders on 3rd March, 2023 at 11 AM and directed the unsecured creditors on 3rd March, 2023 at 2 PM, to approve the arrangement embodied in the Scheme under Sections 230 to 232 of the Act, through Video Conferencing and/ or Other Audio-Visual Means, without the requirement of physical presence at a common venue.

It was contended that the demerger will enable both the Companies to enhance business operations by streamlining operations in a more efficient management control and will outline the independent growth strategies.

The Board had approved the demerger of the Governance and IT/ITES division in November, 2021. Subsequently, in connection with the composite scheme of arrangement, the Company had obtained consent from SEBI, Stock Exchanges, and clearances from other stakeholders.