Refex Green Mobility Demerger Analysis and Valuation Concerns

Recently, Refex Industries Limited announced that it will separately list its green mobility business through a series of restructuring steps, a segment the company only began building in 2023. While the move is positioned as a value-creation exercise, the question remains: given its small size and substantial capital needs, can this fledgling business truly hold its ground as an independently listed entity?

- Anirudha Jain

Refex Industries Limited (“RIL” or “Transferee Company” or “Demerged Company”) is primarily engaged in the business of Ash & Coal handling amongst other activities. RIL through its subsidiaries is also engaged in Green mobility business and has recently started Wind power business. The equity shares of RIL are listed on the BSE Limited and the National Stock Exchange of India Limited.

Refex Mobility Limited (“RML” or “Resulting Company”) is incorporated recently to facilitate the proposed demerger. Currently, RML is a wholly-owned subsidiary of RIL.

Refex Green Mobility Limited (“RGML” or “Transferor Company”) is engaged in the business of providing transport services using vehicles running on cleaner fuels (EV). The Company operates fleet of vehicles that are deployed for passenger mobility using verified professional drivers and technology driven operational frameworks. Currently, RGML is a wholly-owned subsidiary of RIL.

The Proposed Transaction

The Board of Directors of RIL have approved a composite scheme of Arrangement ('the scheme') is presented under Sections 230-232 and other applicable provisions of the Companies Act, 2013, rules and regulations thereunder, for:

• Amalgamation of Refex Green Mobility Limited with Refex Industries Limited;

• Demerger of the Green Mobility Business Undertaking of RIL into Refex Mobility Limited.

The Appointed date for both merger & demerger will be 1st April 2025. To streamline the execution of the amalgamation as well as the demerger, the scheme explicitly provides that the amalgamation part will be given effect first followed by the demerger.