New rules seek to speed up merger, demerger approvals

Firms listed on stock exchanges still need to go to the NCLT to secure approvals for mergers and demergers

- Neha Joshi

A new standard operating procedure (SOP) has set the framework for slashing the protracted procedural drift involved in securing regulatory approvals for mergers and demergers, creating much-needed predictability for dealmakers. Yet, the toughest hurdles remain untouched.

The SOP rolled out by National Stock Exchange of India Ltd (NSE) and BSE Ltd, effective 1 August, promises a seven-working-day processing window for merger and demerger applications if all the documents are in order. Until now, the processing window typically stretched for 3-5 months.

The framework, which has been mandated by the Securities and Exchange Board of India (Sebi), also scraps physical paperwork, requiring only digital filings through platforms such as NSE's Electronic Application Processing System and BSE's Listing Centre.

But firms listed on stock exchanges still need to go to the National Company Law Tribunal (NCLT) to secure approvals for mergers and demergers—a time-consuming and laborious process the government had considered eliminating.