Shankara Building Products Limited (SBPL) has issued crucial guidance to its shareholders regarding the apportionment of acquisition costs for equity shares following its demerger with Shankara Buildpro Limited (SBL). This move comes in the wake of a significant corporate restructuring sanctioned by the National Company Law Tribunal.

Demerger Details

The National Company Law Tribunal, Bengaluru Bench, approved the scheme of arrangement on August 21, 2025. This arrangement involves the transfer of SBPL's trading business undertaking to SBL. Under the terms of the demerger:

• Shareholders will receive one fully paid-up equity share of Rs 10 face value in SBL for every share held in SBPL.
• The record date for this share allocation is set for September 24, 2025.

Cost Allocation Guidelines

SBPL has provided a clear framework for shareholders to apportion their pre-demerger acquisition costs:

• 34.19% for Shankara Building Products Limited shares
• 65.81% for Shankara Buildpro Limited shares

This allocation is crucial for shareholders when calculating their cost basis for future capital gains considerations.

Example of Cost Allocation

To illustrate the application of these guidelines, SBPL provided an example:

Tax Implications

The company has clarified several important tax-related points:

1. The share issuance is not taxable under Section 47(vid) of the Income Tax Act.
2. For capital gains purposes, the acquisition date of SBL shares will be considered the same as the original purchase date of SBPL shares.

Regulatory Compliance

SBPL emphasized that this guidance is for general information and does not substitute professional tax advice. The company has duly informed the BSE Limited and the National Stock Exchange of India Limited about these developments, ensuring transparency and regulatory compliance.

Shareholder Action Required

Shareholders are advised to carefully consider this information for their tax planning and record-keeping purposes. While the company has provided this guidance, it recommends that shareholders seek independent opinions if needed, particularly given the complexity of tax laws and potential future changes in regulations.

This corporate action represents a significant change for SBPL shareholders, requiring careful attention to the cost allocation process for their investment portfolios.

Shankara Building Products Limited (SBPL) has announced a significant corporate action, setting the stage for its demerger with Shankara Buildpro Limited. The company has fixed September 24, 2025, as the record date for this strategic move, marking a pivotal moment for its shareholders and the organization's structure.

Demerger Details

The Board of Directors of both Shankara Building Products Limited and Shankara Buildpro Limited have approved the scheme of arrangement for the demerger. Under this scheme:

• Shareholders of Shankara Building Products will receive one fully paid-up equity share of Shankara Buildpro Limited for every one equity share held in SBPL.
• The new equity shares will have a face value of Rs 10 each.
• The record date for determining eligible shareholders is set for Wednesday, September 24, 2025.

Listing and Regulatory Approvals

The newly issued equity shares of Shankara Buildpro Limited are slated for listing on both the National Stock Exchange of India Limited (NSE) and the BSE Limited. However, this listing is subject to applicable regulations and necessary regulatory approvals.

Corporate Communication

In a letter dated September 12, 2025, addressed to both the BSE and NSE, Ereena Vikram, Company Secretary & Compliance Officer of Shankara Building Products Limited, officially communicated the record date and details of the demerger. This communication follows the company's previous intimation on September 9, 2025, regarding the scheme of arrangement.

Implications for Shareholders

This demerger represents a significant development for SBPL shareholders:

1. Equity Distribution: Shareholders will maintain their stake proportion in the new entity.
2. Portfolio Diversification: Investors will now hold shares in two distinct companies, potentially offering diversified exposure within the building products sector.
3. Value Unlocking: The demerger may unlock value by creating two focused entities, each with its specific business objectives and strategies.

Investors and market participants are advised to keep a close watch on further announcements regarding the completion of the demerger process and the subsequent listing of Shankara Buildpro Limited shares on the stock exchanges.

As this corporate action unfolds, it marks a new chapter in the strategic direction of Shankara Building Products Limited, potentially reshaping its business structure and market positioning in the building products industry.