NCLT admits petition for reduction of share capital; equity face value proposed to be cut from Rs. 10 to Re. 1
Balkrishna Paper Mills has received the NCLT order dated 14.10.2026 admitting its petition for reduction of share capital.
By ScoutQuest · · 3 min read
- Securities Premium Reserve
- ~Rs. 23.29 crore
- Equity Face Value Reduction
- from Rs. 10 to Re. 1
- Preference Share Capital Reduced
- Rs. 110 crore
What the company told the exchange
Balkrishna Paper Mills has informed the stock exchanges that it received the order of the Hon'ble National Company Law Tribunal, Mumbai, in respect of the hearing held on 14.10.2026, and that the petition has been admitted. The petition, C.P./214(MB)2026, is under Section 66 read with Section 52 of the Companies Act, 2013 for reduction of share capital, and the company has been directed to comply with the necessary directions in the order. The petition is returnable on 21.01.2027.
What the reduction involves
- Accumulated losses are to be adjusted first from the Securities Premium Reserve of ~Rs. 23.29 crore, and the remaining balance by reducing the issued, subscribed and paid-up equity share capital.
- The face value of each equity share is to come down from Rs. 10 to Re. 1, an amount of Rs. 28,99,75,788, without any payment or consideration to the equity shareholders.
- The entire 6.5% Non-Cumulative Redeemable Preference Share Capital of Rs. 110 crore is to be reduced. The consideration payable to preference shareholders is to be discharged as and when adequate funds become available, and until then that amount is to be treated as an unsecured, non-interest-bearing loan in the books of accounts.
The company's stated reasoning
- Accumulated losses as at 30 September, 2025 stand at ~Rs. 278.39 crore, and the company says its existing share capital no longer reflects its true financial position.
- It says it does not have any major business operations at present, while the management is evaluating and considering new business opportunities, including the commencement of real estate-related activities.
- It states that the reduction will not have any adverse effect on the creditors or employees, or on the company's ability to meet its obligations in the ordinary course of business, and that the face value and paid-up value of all equity shares will fall, with no impact on the shareholding percentage of equity shareholders before and after the reduction.
The process ahead
- The company is directed to serve notice of the hearing, along with the application, on its secured and unsecured creditors, who may submit representations or objections to the Tribunal within three months of receiving the notice. If they do not, it is presumed that they have no objection to the proposed reduction.
- Notices are also to go to the Central Government through the Regional Director, Western Region, the Registrar of Companies, the Ministry of Corporate Affairs, SEBI, BSE and NSE, and the Income Tax authorities, each of whom may submit representations to the Tribunal.
- The company is directed to publish a notice of the hearing in newspapers within the timelines stated in the order, and to file an affidavit confirming dispatch and publication of the notices.
Reading this as an investor
- This is an interim step: the petition has been admitted, and the reduction is subject to the directions in the order and the completion of the notice and objection process.
- For equity shareholders the visible change is in face value, not in the number of shares held or the percentage stake, as stated in the update, and no payment or consideration is being made to them.
- For preference shareholders, the update states the amount payable will be discharged as and when adequate funds become available.
Also from Balkrishna Paper Mills
NCLT admits petition for reduction of share capital; next hearing 21 January 2027
21 Oct 2026
More numbers
- Existing face value per equity shareRs. 10/- each
- Reduced face value per equity shareRs. 1/- each
- Securities Premium Reserve to be utilisedRs. 23,28,61,241/-
- Reduction in paid-up equity share capital (face value Rs. 10 to Re. 1)Rs. 28,99,75,788/-
- Accumulated losses as at 30 September, 2025Rs. 2,78,39,19,643/-
- Preference share capital to be reducedRs. 1,10,00,00,000/-
- Dividend rate on preference shares6.5%
- Period for creditors to submit objectionsthree months
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