Zenith Health Care Limited will seek shareholder approval for the re-appointment of Chairman and Managing Director Mahendra C Raycha and a material related-party transaction valued up to ₹100 crore with Achyut Healthcare Limited at its Annual General Meeting (AGM) on August 28, 2026. The Board of Directors approved these resolutions on August 4, 2026, citing leadership continuity and strategic supply chain alignment as key drivers. Investors must act by the record date of August 21, 2026, to exercise voting rights via e-voting or attend the meeting through video conferencing.

The re-appointment of Mahendra C Raycha is mandated under Section 196 of the Companies Act, 2013, as he attained the age of 70 years in October 2023. His new three-year term begins July 1, 2026, with a monthly remuneration cap of ₹2,00,000, totaling up to ₹12,00,000 per annum including perquisites. Additionally, shareholders will vote on the regularization of Joint Managing Director Akshit M Raycha for a three-year term from May 29, 2026, with an annual remuneration cap of ₹24,00,000. Mrs. Neela M. Raycha also offers herself for re-appointment as a director by rotation.

Key Resolutions and Financial Context

A critical agenda item is the related-party transaction involving the sale of Active Pharmaceutical Ingredients (APIs), raw materials, and packing materials to Achyut Healthcare Limited. Valued up to ₹100 crore for FY27, this deal requires special shareholder consent under Regulation 23 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Both Mahendra C Raycha and Akshit M Raycha hold directorships in Achyut Healthcare Limited and will abstain from voting. The Promoters' Group will also abstain.

The AGM will also adopt the financial results for FY26, which reported a Profit After Tax (PAT) of ₹0.51 lakh, a significant decline from ₹6.70 lakh in FY25. Total income fell to ₹1,093.65 lakh in FY26 from ₹1,176.11 lakh in FY25. Expenditure and depreciation stood at ₹1,092.05 lakh. Despite the profit contraction, the company maintains a zero-debt status, relying on internally generated funds.

What the Numbers Show

The convergence of declining profitability with a substantial related-party transaction warrants close investor scrutiny. With PAT contracting by approximately 92% year-on-year to ₹0.51 lakh, the approval of the ₹100 crore API sales agreement with Achyut Healthcare Limited becomes a pivotal governance checkpoint. The simultaneous increase in remuneration for the Joint Managing Director, amidst shrinking net profits, may draw attention during the e-voting process. However, the company’s zero-debt position provides a buffer against liquidity risks, allowing management to focus on operational efficiency and supply chain consolidation through the related-party channel.

Zenith Health Care Ltd has approved a scheme to amalgamate Achyut Healthcare Limited with and into the company to enhance operational efficiency and simplify the group structure. The board approved the merger at its meeting held on July 14, 2026, following recommendations from the Audit Committee and the Committee of Independent Directors. The amalgamation will result in the issuance of equity shares by Zenith Health Care to the shareholders of Achyut Healthcare, which will subsequently dissolve without winding up.

The transaction is classified as a related party transaction as both entities fall under the same promoter group. However, the consideration will be discharged on an arm's length basis based on a valuation report dated July 14, 2026 from Den Valuation (OPC) Private Limited and Vanshika Vijayvargiy. Aftertrade Broking Private Limited also issued a fairness opinion regarding the share exchange ratio. The scheme is subject to requisite approvals from statutory and regulatory authorities, including the jurisdictional bench of the National Company Law Tribunal (NCLT), as well as shareholder and creditor consent.

Share Exchange Ratio and Financials

No cash consideration is payable under the scheme. Upon effectiveness, Zenith Health Care will issue 119 fully paid-up equity shares of INR 1 each for every 50 fully paid-up equity shares of INR 1 each held in Achyut Healthcare. As of March 31, 2026, Achyut Healthcare reported total assets of INR 3809.44 lakhs and a net worth of INR 3506.12 lakhs, while Zenith Health Care reported total assets of INR 1098.59 lakhs and a net worth of INR 742.42 lakhs.

Rationale and Synergies

The merger aims to combine the businesses of both companies, which operate in similar pharmaceutical sectors. Achyut Healthcare is engaged in trading active pharmaceutical ingredients (APIs) and is establishing manufacturing facilities for tablets, capsules, and inhalation products. Zenith Health Care manufactures and exports pharmaceutical products, including tablets, capsules, and oral liquids, to 11 countries. The amalgamation is expected to unlock new market opportunities, optimize manufacturing capacity, and create a stronger balance sheet for the combined entity.

Shareholding Pattern

The amalgamation will alter the shareholding pattern of Zenith Health Care significantly. The total number of shares will increase from 5,37,39,000 to 62,81,68,660. Promoter holding is set to rise from 28.74% to 45.80%, while public shareholding will decrease from 71.26% to 54.20%.

The scheme will be filed with BSE Limited to obtain a no-objection letter. Both companies will comply with requirements for providing e-voting facilities, acting on the scheme only if public shareholder votes in favour exceed those against it.