Demerger / Spin-Off

A demerger or spin-off separates a business, division, or undertaking out of a company into a separate entity — to sharpen focus, unlock value, attract investment, or prepare for a sale. It is usually done through a scheme of arrangement sanctioned by the NCLT.

The firm structures the demerger for tax-neutrality where the conditions of Section 2(19AA) are met, prepares the scheme, and manages the process with counsel.

Demerger support covers, including:

• Structuring the demerger and the rationale
• Meeting the tax-neutral demerger conditions
• The valuation and any share-entitlement ratio
• Drafting the scheme of arrangement
• The NCLT process, with counsel, and giving effect

1. 01

   Structure

   Design the demerger for focus, value, and tax-neutrality.

2. 02

   Draft

   Prepare the scheme and supporting documents.

3. 03

   Approvals

   Obtain board, member, creditor, and regulatory approvals.

4. 04

   NCLT & effect

   Support the NCLT sanction (with counsel) and give effect to the demerger.

PBT structures and drives your demerger to effect, tax-efficiently.

• A sound demerger structure
• Tax-neutrality where the conditions are met
• A well-drafted scheme
• The NCLT process managed, with counsel
• Scope, deliverables, and fees agreed in writing up front

• Why demerge a business?

  To sharpen focus, unlock the value of a division, attract focused investment, or prepare a unit for sale. We help establish whether it's the right move and structure it.

• Can a demerger be tax-neutral?

  Yes, if it meets the conditions of Section 2(19AA) of the Income-tax Act. We structure it to qualify where possible.

• How long does it take?

  A demerger through the NCLT typically takes several months to over a year, depending on approvals and the Tribunal.