Mukta Arts Limited has issued a postal ballot notice seeking shareholder approval for material related party transactions with its subsidiary, Mukta A2 Cinemas Private Limited, for an aggregate value of ₹107.69 crore during FY27.

The proposed transactions include the conversion of outstanding unsecured loans and accrued interest worth ₹100.15 crore into Compulsorily Convertible Preference Shares (CCPS). This move aims to improve the cash flow position and support the sustainable growth of the cinema exhibition subsidiary.

Transaction Details

The resolution covers several types of transactions between the parent company and its 70% owned subsidiary. The bulk of the value is attributed to the debt restructuring component, while the remainder includes routine operational flows such as service charges and interest income.

What the Numbers Show

The proposed transaction value represents 61.93% of Mukta Arts' annual consolidated turnover for FY26, significantly exceeding the 10% materiality threshold defined by SEBI regulations. Furthermore, the transaction amount is equivalent to 125.50% of Mukta A2's standalone turnover for the same period, indicating that the financial restructuring is substantial relative to the subsidiary's operational scale.

Voting Timeline

Shareholders eligible as of the cut-off date of October 12, 2026, can cast their votes through remote e-voting. The voting window opens on October 19, 2026, at 9:00 am and closes on November 17, 2026, at 5:00 pm. The results will be declared by the scrutinizer following the conclusion of the voting period.

Mukta Arts shareholders approved a special resolution to sell, divest, dilute, or dispose of the company's investments in a material subsidiary during the 44th Annual General Meeting held on September 22, 2026. The resolution passed with 99.99% of votes in favor, reflecting strong promoter and public support for strategic portfolio adjustments.

The meeting, conducted via video conferencing, also adopted the audited standalone and consolidated financial statements for FY26 and reappointed Parvez Farooqui as a director retiring by rotation. This corporate action follows a fiscal year where consolidated EBITDA rose 52% to ₹2,644 lakh, driven by operational improvements in cinema and education segments.

Key resolutions passed

The AGM addressed both ordinary and special business items. The ordinary business included the adoption of financial reports and the re-appointment of directors. The special business focused on strategic portfolio adjustments.

All resolutions were deemed passed subject to receipt of requisite majority votes cast through remote e-voting and e-voting at the meeting. The scrutinizer’s report, issued by Kaushal Dalal of KDA & Associates, confirmed that promoters voted unanimously in favour across all items. Notably, for the re-appointment of Parvez Farooqui, promoters held an interest but still voted unanimously in favor, while public non-institutional holders recorded minimal dissent (0.0392% against).

Financial performance context

The approval for subsidiary divestment comes after a year of strengthened financial positions across key operating entities. Consolidated revenue from operations grew 4.3% to ₹17,391 lakh, while net loss narrowed by 32% to ₹1,180 lakh. The improvement reflects genuine operating leverage, with consolidated margins expanding from 10% to 15%.

Segment-wise, Mukta A2 Cinemas saw revenue rise 18% and EBITDA surge 127% to ₹1,474 lakh. Whistling Woods International posted a 7% revenue increase to ₹5,842 lakh and a 29% jump in EBITDA to ₹652 lakh.

Strategic initiatives and outlook

Beyond the subsidiary divestment, Mukta Arts Production is returning to active film production with projects like Maanya, Taal 2, and Khalnayak 2. The company is also diversifying into animation through SGM Studios and expanding its live entertainment portfolio with events such as Eva Live × Mithoon. Additionally, Mukta A2 Cinemas has entered a management-contract partnership with One Cinemas to build a capital-light model, reducing exposure to box office cycles while retaining ownership of high-performing assets.