Arkade Developers Limited has announced a significant corporate restructuring move, approving a plan to separate the rental business from its wholly-owned subsidiary, Filmistan Private Limited. The decision was made during a board meeting held on September 29, 2025, as part of a strategic initiative to streamline operations and enhance administrative efficiency.

Demerger Details

The company's board of directors has approved a Scheme of Arrangement for the demerger of the rental business undertaking from Filmistan Private Limited into Arkade Developers Limited. This move is subject to necessary statutory and regulatory approvals, including the green light from the National Company Law Tribunal (NCLT) and other relevant authorities.

Financial Implications

The demerged rental business undertaking of Filmistan Private Limited reported a turnover of INR 13.05 lakhs for the financial year 2024-25, representing 87.30% of Filmistan's total turnover. This underscores the significance of the rental business within the subsidiary's operations.

Rationale Behind the Demerger

Arkade Developers has outlined several key benefits expected from this corporate action:

1. Streamlined Management: The demerger will consolidate the leasehold rights of the property under Arkade Developers, which already owns the underlying land. This integration is expected to result in a single ownership framework, leading to improved administrative efficiencies and rationalized operations.

2. Future Opportunities: With unified ownership, Arkade Developers will be better positioned to explore and capitalize on future business opportunities.

3. Stakeholder Interests: The company asserts that the proposed demerger is in the best interest of shareholders, creditors, and other stakeholders of both Filmistan Private Limited and Arkade Developers Limited.

Structural Changes

It's important to note that there will be no change in the shareholding pattern of Arkade Developers Limited as a result of this demerger. Filmistan Private Limited will continue to be a wholly-owned subsidiary of Arkade Developers, with the parent company retaining 100% of its equity share capital.

Timeline and Next Steps

The appointed date for the Scheme of Arrangement is set for August 1, 2025. Arkade Developers will now proceed to file the scheme with the stock exchanges in compliance with SEBI Listing Regulations. The company awaits various regulatory approvals, including the crucial nod from the NCLT, to move forward with the implementation of this strategic restructuring.

Investors and stakeholders will be keenly watching the progress of this demerger, as it represents a significant step in Arkade Developers' corporate strategy to optimize its business structure and potentially unlock value in its rental business segment.

Arkade Developers Limited, a prominent real estate company, has announced a strategic financial restructuring involving its wholly-owned subsidiary, Filmistan Private Limited. The Board of Directors has approved the conversion of pre-existing inter-company loans worth Rs. 12.61 crores into equity shares of Filmistan Private Limited.

Transaction Details

The conversion involves the issuance of 7,415 equity shares with a face value of Re. 1 each at a premium of Rs. 16,999 per share. This transaction will result in Arkade Developers holding a 7.41% stake in Filmistan Private Limited. The company emphasized that this restructuring of existing financial exposure requires no fresh capital infusion and is expected to be completed within one month.

About Filmistan Private Limited

Filmistan Private Limited operates in two primary business segments:

1. Real estate leasing
2. Cinematographic film business

As of March 2025, Filmistan Private Limited reported:

• Net worth: Negative Rs. 12.03 crores
• Turnover: Rs. 14.95 lakhs

The subsidiary was incorporated on April 29, 1943, and has a long-standing presence in the entertainment and real estate sectors.

Financial Performance

Filmistan Private Limited's turnover for the past three financial years:

Regulatory Compliance

Arkade Developers Limited has confirmed that the transaction is exempt from related party transaction provisions under listing regulations as it involves a wholly-owned subsidiary. The company has stated that the transaction is being conducted on an arm's length basis.

Management Statement

In a filing to the stock exchanges, Arkade Developers Limited stated, "This is to inform you that pursuant to Regulation 30 read with Para A of Part A of Schedule III of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board of Directors of the Company in their meeting held today i.e., 25th September, 2025 has approved and authorized the conversion of pre-existing inter-company loans into equity shares of its subsidiary company."

The company further emphasized that this transaction does not involve any fresh infusion of capital but pertains only to the restructuring of the company's existing financial exposure.

This strategic move by Arkade Developers Limited appears to be aimed at optimizing its financial structure and potentially strengthening the position of its subsidiary, Filmistan Private Limited. Investors and market analysts will likely be watching closely to see how this restructuring impacts the future performance of both entities.