NCLT Allahabad Approves First Motion For Demerger Of Umesh Modi Group Firm's Nutraceutical Business

The National Company Law Tribunal (NCLT) at Allahabad has approved the first motion application for a scheme of arrangement involving Umesh Modi Group's G S Pharmbutor Private Limited, for the demerger of its nutraceutical business into its wholly owned subsidiary, Modilac Private Limited.

A bench of Judicial Member Praveen Gupta and Technical Member Ashish Verma passed the order on December 12, 2025, allowing the companies to move forward with the proposed restructuring.

G S Pharmbutor, incorporated in 1985, is engaged in the manufacturing and trading of pharmaceutical, nutraceutical, cosmetics and personal care products, and operates manufacturing facilities at the Integrated Industrial Estate, Rudrapur, Uttarakhand.

Under the scheme, its nutraceutical business is proposed to be demerged on a going concern basis into Modilac, a newly incorporated company established to focus exclusively on nutritional products, food supplements and dietary supplements.

The boards of directors of both companies unanimously approved the scheme on September 30, 2025. The companies told the tribunal that the nutraceutical business has distinct operational characteristics and growth potential, making it suitable to be housed in a separate corporate entity.

The demerger, they said, would allow sharper strategic focus, improved management control, operational rationalisation and optimal utilisation of resources, while enabling the business to attract sector-specific investors and strategic partners.

On the financial structuring, the tribunal approved a share exchange ratio of 1:1. Under the scheme, Modilac will issue one equity share of Rs 10 each, fully paid up, for every one equity share of Rs 10 each held by shareholders of G S Pharmbutor.

The tribunal dispensed with the requirement of convening meetings of equity shareholders and unsecured creditors of Modilac, noting that consent affidavits had been filed by all equity shareholders and all three unsecured creditors, and that the company has no secured creditors.

However, the NCLT directed that separate meetings of the equity shareholders, secured creditors and unsecured creditors of G S Pharmbutor be convened. The meetings have been scheduled for January 30, 2026, at 3 pm, 4 pm and 5 pm respectively, and will be conducted through video conferencing with a facility for remote e-voting. The tribunal further directed that individual notices be issued and statutory advertisements published at least 30 clear days before the scheduled meetings.

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