K M Sugar Mills Ltd

Transaction overview

• Transmission of 81,45,900 shares (8.85%) from Lakshmi Kant Dwarkadas HUF to Naina Devi Jhunjhunwala, off-market.
• Exemption from open offer under Regulation 10(1)(g) applied.
• Acquirer: Naina Devi Jhunjhunwala; Transferor: Lakshmi Kant Dwarkadas HUF (Promoter/Promoter Group).
• Nil consideration (transmission pursuant to dissolution).
• Pre-transaction acquirer holding: 22.18%; post: 31.06% for Naina Devi Jhunjhunwala.
• Pre-transaction transferor holding: 8.85%; post: 0% for Lakshmi Kant Dwarkadas HUF.
• Promoter group aggregate shareholding remains 56.51% pre- and post-transaction; public shareholding unaffected.

K.M. Sugar Mills Ltd Trading Window closed from 01st October, 2026 till 48 hours after the declaration of the Financial Results of the Company for the quarter and half year ended on 30 September, 2026.

Demerger outline and timeline

• Distillery Division demerger into a standalone entity under a scheme sanctioned by NCLT.
• Effective date fixed at 01 October 2026; record date 02 October 2026.
• Share entitlement: one new Rs10 share for each five Rs2 shares.
• New shares to be listed on NSE and BSE, subject to approvals.
• Shareholders of the Demerged Company receive shares in the Resulting Company.

Scheme overview

• Demerger of the Distillery Division to the Resulting Company under the Scheme.

Rationale

• Separates the Distillery Division into a standalone entity for focused operations.

Key terms

• Nature: demerger of the Distillery Division to the Resulting Company.
• Share exchange: 1 new Rs 10 share for every 5 old Rs 2 shares.
• Effective Date: 01 Oct 2026; Record Date: 02 Oct 2026.
• Listing: new shares to be listed on NSE and BSE, subject to approvals.
• Approvals: NCLT sanction already received; regulatory approvals required for listing.

Financial impact

• Shareholding changes via 1:5 entitlement; post-scheme equity issued to Demerged Company's shareholders.

Stakeholder impact

• Shareholders receive new equity in the Resulting Company; listing planned on two exchanges.
• Distillery Division's operations become part of the Resulting Company.

Status and next steps

• NCLT sanction obtained; Effective Date 01 Oct 2026; Record Date 02 Oct 2026.
• Shares to be listed on NSE and BSE subject to approvals.

Overview

• Demerger of a Distillery Division from the parent into its wholly owned subsidiary.

Rationale

• Segregates Distillery Division for focused operations and separate listing.

Key Terms

• Nature and structure: demerger of a division into the listed standalone entity.
• Share exchange: 1 new Rs10 share per 5 Demerged Rs2 shares.
• Appointed Date: 01-Apr-2026; Effective Date/Record Date to be fixed.
• Related party: Demerged and Resulting are related; replica shareholding proposed.
• Approvals: NCLT sanction obtained; stock exchanges to grant in-principle approvals.
• Assets/Liabilities transfer: Distillery assets and liabilities transfer; Remaining Business stays with parent.
• Listing: Resulting Company to be listed; Demerged Company to remain listed.

Financial Impact

• Capital structure: Authorized capital raised to Rs 20 crore for Resulting Company.
• Pre/post scheme: Demerged assets/liabilities transfer; investment in Resulting Company canceled; replica shares issued.
• Accounting: assets/liabilities recorded at book values; intercompany balances adjusted.
• Taxation: Liabilities and taxes on the Demerged Undertaking treated as those of Resulting Company; GAAR reserved.
• Record Date: Appointed Date 01-Apr-2026; Record Date to be fixed; Effective Date after sanction.
• Share entitlements: New Shares issued to Demerged Company's shareholders; existing Resulting Company capital canceled.

Stakeholder Impact

• Shareholders receive New Shares in Resulting Company proportional to holdings.
• Creditors: transferred liabilities; security arrangements maintained.
• Employees: transfer to Resulting Company on same terms; retirement/benefits recognized.
• Operations/structure: Distillery division becomes standalone; Remaining Business continues with Demerged Company.
• Listing: both entities to be listed on major exchanges; timelines subject to approvals.

Status & Next Steps

• Sanction: NCLT order dated 19-08-2026; Scheme binding on all concerned.
• Effective/Record Date: Appointed Date 01-04-2026; Effective Date to be communicated.
• Regulatory approvals: SEBI/Stock Exchanges in-principle; further filings required.
• Record Date/Notice: Board to announce record date; SEBI/Listing compliance.

Transaction details

• Nature: Transmission of shares due to dissolution from promoter HUF to promoter group.
• Exemption: Regulation 10(1)(g) exemption from open offer.
• Acquirer: Promoter Group; Transferor: Promoter HUF.
• Shares transmitted: 1,920,000 shares (2.09% of paid-up capital).
• Method: Off-market transmission.
• Consideration: Nil.
• Pre-transaction acquirer holding: 18,483,348 shares (20.09%).
• Post-transaction acquirer holding: 20,403,348 shares (22.18%).
• Promoter group total unchanged; public shareholding unaffected.
• Exemption order reference: None.

Key disclosures

• Target Company: K M Sugar Mills Ltd.
• Disclosing party: L.K. Jhunjhunwala HUF (Promoter) to Naina Jhunjhunwala (Promoter Group) via dissolution.
• Transaction Type: Transmission of shares within the Promoter Group.
• Pre-Transaction Holding: Lakshmi Kant Dwarkadas held 10.94% (10,065,900 shares).
• Pre-Transaction Holding: Marvel Business Pvt Ltd held 13.12% (12,065,975 shares).
• Post-Transaction Holding: Promoter Group total at 56.51% (51,991,499 shares).
• Notes: Transmission occurred due to dissolution of L.K. Jhunjhunwala HUF.

Overview

• Distillery Division to be demerged into a new company, which becomes a wholly owned subsidiary.

Rationale

• Consolidates distillery operations into a separate entity for focus and value unlocking.

Key Terms

• Nature: demerger of a division into a new company.
• Appointed Date: 01-Apr-2026 (effective date upon completion).
• Related party: Resulting Company becomes wholly owned subsidiary.
• Approvals: NCLT sanction; regulatory observations resolved; no exchange objections recorded.

Financial Impact

• Share entitlement: 1 new Rs10 share in Resulting Company for every 5 Rs2 shares in Demerged Company.
• Formation: new equity issued; Resulting Company becomes wholly owned subsidiary.
• Assets and liabilities of the Demerged Undertaking transferred to the Resulting Company.
• Tax considerations: department observations addressed; taxes payable as per law.

Stakeholder Impact

• Shareholders: receive equity in the Resulting Company; ownership via the new entity.
• Creditors: rights preserved; tax and liability matters addressed under the scheme.
• Employees: transfer to Resulting Company with no service interruption.
• Operations: Distillery Division activities continue under the new entity; structure streamlined.

Status & Next Steps

• Status: NCLT sanction granted on 19.08.2026; order binding from Appointed Date.
• Next steps: file revised MOA/AOA; register with ROC; align tax/regulatory filings.
• Effective date will be the completion date after the second motion order.

Scheme overview

• Demerger of the Distillery Division from the existing company to the resulting company.
• NCLT has sanctioned the scheme; order pronounced on August 19, 2026.
• Order copy awaited; effective date not disclosed.
• Purpose: reorganize to separate distillery business into a standalone entity.