Arihant Capital Markets Limited (ACML) has announced a comprehensive restructuring plan aimed at streamlining its operations and unlocking shareholder value. The Board of Directors approved a composite scheme of arrangement on August 26, 2025, which involves multiple group companies and is designed to create two focused listed entities.

Key Components of the Restructuring Scheme

1. Amalgamation: Arihant Financial Services Limited (AFSL), a wholly-owned subsidiary of ACML, will be merged into ACML with no issuance of new shares.

2. Demerger: All business segments of ACML, except for retail broking, immovable properties, and investments, will be demerged into Arihant Elite Financial Solutions Limited (AEFSL) on a going concern basis.

3. Share Issuance: AEFSL will issue equity shares to ACML shareholders in a 1:1 ratio, meaning for every one share held in ACML, shareholders will receive one share in AEFSL.

4. Business Transfers:

   • The Merchant Banking Business will be transferred from AEFSL to Arihant Investment Banking Services Limited (AIBSL) for a cash consideration of INR 5.98 crores.
   • The Distribution Business will be transferred from AEFSL to Arihant Money Marvel Wealth Management Limited (AMMWML) for INR 0.57 crores.

5. Listing: AEFSL is proposed to be listed on both BSE Limited and the National Stock Exchange of India Limited, subject to regulatory approvals.

Financial Impact

The demerged undertaking, comprising the Merchant Banking and Distribution businesses, represented 2.18% of ACML's total standalone turnover for the year ended March 31, 2025. The turnover of these businesses was INR 7.65 crores, while the NBFC business of AFSL contributed an additional INR 6.81 crores.

Rationale Behind the Restructuring

The company cited several reasons for this strategic move:

1. Focused Growth: The restructuring aims to ensure sharper focus, faster growth, and better regulatory compliance by reorganizing diverse businesses into separate entities.

2. Value Creation: By creating two listed entities - ACML specializing in Retail Broking and AEFSL focusing on NBFC business with subsidiaries in Merchant Banking and Distribution - the company expects to unlock value and provide shareholders with investment flexibility.

3. Enhanced Transparency: The new structure, with no cross-holdings, is expected to improve transparency, accountability, and corporate governance.

4. Attracting Investors: Each business will be better positioned to attract suitable investors, talent, and strategic partners.

Impact on Stakeholders

• Shareholders: Both promoter and non-promoter shareholders will receive shares in AEFSL, maintaining their ownership across both entities.
• Employees: The scheme ensures continuity of service and preservation of existing benefits for all employees.
• Creditors: The restructuring does not involve any compromise or arrangement affecting creditor rights.

Regulatory Approvals

The implementation of this scheme is subject to approvals from shareholders, creditors, the National Company Law Tribunal, the Securities and Exchange Board of India, stock exchanges, the Reserve Bank of India, and other regulatory authorities.

Registered Office Relocation

In a separate development, ACML's board has approved shifting the company's registered office within Indore city limits, from 6, Lad Colony, Y. N. Road to 601, Atlantis Tower, Plot No. 13-A, Scheme No. 78.

This ambitious restructuring plan marks a significant milestone in Arihant Capital Markets' corporate journey, potentially reshaping its business landscape and offering new opportunities for growth and value creation.

Arihant Capital Markets Limited has issued a second corrigendum to its Extra-Ordinary General Meeting (EGM) notice, scheduled for August 21, 2025. The document provides additional disclosures and corrects a valuation error related to the company's proposed preferential allotment of equity shares.

Fundraising Plans and Allocation

The company aims to raise ₹91.35 crore through the preferential issue. The funds are earmarked for various purposes:

Valuation Error and Correction

The corrigendum reveals an inadvertent error in the Profit After Tax (PAT) figure for FY 2023 used in the initial valuation report. The PAT was incorrectly stated as ₹3,858.34 lakhs, while the correct figure is ₹2,911.76 lakhs. This error led to the following adjustments:

• The Price to Earnings Capacity Value (PECV) valuation has been revised to ₹81.29 per share.
• The average valuation has been adjusted to ₹76.57 per share, down from the originally mentioned ₹77.31.

Despite these revisions, the proposed issue price remains unchanged at ₹87 per share, as it continues to meet regulatory requirements.

Additional Disclosures

The corrigendum provides more details on the intended use of the funds:

1. Business Growth & Expansion: Funds will support the expansion of broking operations, enhancement of client-facing services, strengthening of trading platforms, and opening of new regional offices.

2. Technology & Infrastructure Upgrade: Allocation for upgrading IT infrastructure, automated trading systems, cybersecurity measures, and integration with new depositories and exchanges.

3. Working Capital & Capital Expenditure: To meet short- and long-term working capital needs and capital expenditure requirements.

4. Strategic Initiatives & Diversification: Facilitate potential entry into new segments, launch of advisory or fintech services, and pursuit of acquisitions or alliances, subject to board and regulatory approval.

5. General Corporate Purposes: For broader purposes permissible under applicable law, including debt repayment, marketing, compliance, and enhancements in research and analytics infrastructure.

Timeline and Flexibility

The company has set a tentative timeline of 12 months from the receipt of funds for the utilization of the issue proceeds. However, Arihant Capital Markets has noted that the allocation may deviate by ±10% depending on future circumstances and external factors.

Addendum to Valuation Report

The Registered Valuer has issued an addendum dated August 14, 2025, to the original Valuation Report dated July 25, 2025, reflecting the corrected figures. Both documents will be available for inspection by members at the EGM.

The company has apologized for the human error and any inconvenience caused. Shareholders are advised to refer to the corrigendum, which forms an integral part of the EGM Notice, for complete details.