Merge ahead! Govt shifts gears to put fast-track M&As in the express lane

Budget 2025 had stated that requirements and procedures for speedy approval of company mergers would be rationalised.

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Scope of fasttrack mergers (FTMs) will be widened and the process made simpler. As a follow-up to the announcement, the corporate affairs ministry issued a public notice last month containing a draft notification amending Companies (Compromises, Arrangements & Amalgamations) Rules 2016, proposing inclusion of more classes of companies for FTMs.

This is a welcome step. While the aim is to expand the scope of companies that can avail of FTMs, the fast-track route (FTR) itself can be further simplified. GoI proposes to expand the scope of 3 existing categories of FTMs:

of two or more startups,

of one or more startups with one or more small companies, and

between a holding company and its wholly-owned subsidiary,

by adding 4 other classes of companies that can avail of FTR:

Unlisted company with another unlisted company (where neither is a not-for-profit company), both companies having individual borrowings of less than 50 cr and have not defaulted on repayment of such borrowings.

Holding company (listed or unlisted) and one or more unlisted subsidiary company/companies. Coverage is to include 'subsidiary' company, and not just 'whollyowned subsidiary', which is so far the case. Such a subsidiary, though, has to be an unlisted company.