Race Eco Chain has received observation letters stating no adverse observations from both the Bombay Stock Exchange and the National Stock Exchange regarding its draft composite scheme of arrangement. The regulatory clearance allows the company to proceed with filing the scheme before the National Company Law Tribunal.

The proposed transaction involves the demerger of Race Eco Chain into two resultant entities: Geoeco Green Energy Limited and Race Gateway Limited. The exchanges conveyed their observations on September 21, 2026, subject to specific compliance requirements outlined by SEBI and the exchanges themselves.

Scheme Structure and Regulatory Requirements

The draft scheme falls under sections 230 to 232 of the Companies Act, 2013. SEBI had previously issued comments on July 30, 2026, which the exchanges have incorporated into their observation letters. Key conditions include ensuring compliance with Regulation 11 of the SEBI Listing Obligations and Disclosure Requirements Regulations, 2015.

The company must disclose all details of ongoing adjudication, recovery proceedings, or prosecution initiated against the company, its promoters, and directors before the NCLT and shareholders. Additionally, any additional information submitted after filing the scheme must be displayed on the company’s website and the stock exchanges’ websites.

Asset and Liability Transfer

The scheme mandates the transfer of specific business divisions to the resultant companies. The liabilities of Demerged Undertaking No. 1, the Biomass Division of Race Eco, will transfer to Geoeco Green Energy Limited. Demerged Undertaking No. 2, the Restore Bag Division of Race Eco, will transfer to Race Gateway Limited.

The company is required to ensure that financials in the scheme, including those used for valuation reports, are not older than six months. Proposed equity shares issued under the scheme must be in demat form only.

Disclosure and Listing Conditions

Race Eco Chain must provide comprehensive disclosures to shareholders to enable informed decision-making. This includes a small explanation of the scheme, its rationale, synergies, impact on shareholders, and a cost-benefit analysis. Details of the registered valuer and merchant banker, along with the basis for the share swap ratio, must also be disclosed.

Pre- and post-scheme shareholding patterns for Race Eco, Geoeco, and Gateway must be provided as on the date of the shareholders' meeting notice. The company must also disclose capital build-up, revenue, PAT, and EBITDA for the last three years for all three entities.

Geoeco Green Energy Limited and Race Gateway Limited must complete listing formalities and commence trading within sixty days of receiving the NCLT order. Shares allotted pursuant to the scheme will remain frozen in the depository system until listing permission is granted. There shall be no change in the shareholding pattern or control between the record date and listing.

Race Eco Chain announced a ₹4.67 crore investment in its material subsidiary, Ganesha Recycling Chain Private Limited, through the allotment of compulsorily convertible preference shares.

The Board of Directors approved the transaction during its meeting held on September 7, 2026. The company issued 93,379 shares with a face value of ₹10 each to fund the expansion.

Transaction Details

The investment structure involves the issuance of 0.01% Compulsorily Convertible Cumulative Preference Shares (CCPS). This instrument allows Race Eco Chain to maintain its current ownership structure while injecting capital into the subsidiary.

Subsidiary Profile

Ganesha Recycling Chain Private Limited operates in the recycling sector within India. Incorporated on September 10, 2024, the entity has seen a significant rise in turnover over its initial operational period.

The subsidiary reported a turnover of ₹0.01 lakh in 2025 and ₹21.19 lakh in 2026. This growth indicates early-stage commercial activity following its recent incorporation.

Ownership and Regulatory Compliance

Race Eco Chain holds a 51% stake in Ganesha Recycling Chain. The additional investment via CCPS does not alter this equity percentage. The company disclosed that the transaction falls under related-party transactions but was executed at arm's length.

The move aligns with the company's objective to expand its business footprint in the recycling industry. No governmental or regulatory approvals were required for this acquisition.