3M India Limited has issued a comprehensive postal ballot notice to shareholders, seeking approval for critical corporate governance matters and significant related party transactions for the upcoming financial year.

Key Appointments and Corporate Governance

The postal ballot includes two major director appointments that will shape the company's leadership structure. The board has proposed the appointment of Mr. Dwarakanath Ranganath Mavinakere as Non-Executive Independent Director for a five-year term from February 2, 2026 to February 1, 2031. Mr. Mavinakere brings over 34 years of leadership experience across global IT services and financial services, having previously served as Chief Financial Officer of Infosys Limited until November 2018.

Simultaneously, the company seeks approval for appointing Mr. Aseem Kuldip Joshi as Managing Director for five years from April 1, 2026 to March 31, 2031. Mr. Joshi, who was appointed as President and Managing Director (Designate) effective October 13, 2025, brings over 26 years of experience across engineering, consulting, and leadership roles.

Material Related Party Transactions

The postal ballot seeks shareholder approval for substantial related party transactions totaling ₹1,309 crores for FY 2026-27. These transactions are structured across three key resolutions involving the company's parent and group entities.

Transactions with 3M Company, USA

Shareholders will vote on material related party transactions with 3M Company, USA worth ₹576 crores, covering various business activities essential for the company's operations.

A separate resolution addresses royalty payments of ₹110 crores to 3M Company, USA for FY 2026-27. The royalty arrangement, set at 3.25% on sale of manufactured goods, provides the company access to 3M Group's technologies, product portfolio, and the globally recognized 3M brand. The parent company owns 49 technology platforms and invested approximately USD 1.10 billion in Research and Development in 2024.

Transactions with 3M Innovation Singapore Pte Ltd

The third major transaction involves 3M Innovation Singapore Pte Ltd, with proposed transactions worth ₹623 crores for FY 2026-27.

E-Voting Process and Timeline

The company has established a comprehensive e-voting framework to facilitate shareholder participation. The critical dates for the postal ballot process are structured to ensure adequate time for shareholder consideration and voting.

The company has engaged KFin Technologies Limited as the e-voting service provider, with the postal ballot notice being distributed electronically to shareholders whose email addresses are registered with the company or depositories. Physical copies will not be sent, aligning with the Ministry of Corporate Affairs' digital initiative guidelines.

Business Rationale and Strategic Context

3M India's related party transactions reflect its integrated position within the global 3M ecosystem. As the flagship listed company of 3M Company, USA in India, with the parent holding 75% equity stake, these transactions enable access to specialized materials, proprietary technologies, and global supply chain efficiencies that external suppliers cannot replicate.

The company's manufacturing footprint has expanded significantly, with locally manufactured products contributing 59.40% of total sales as of March 31, 2025, compared to 52.90% in March 2014. This growth trajectory, supported by access to 3M's global technologies and brand recognition, has driven the company's profit before tax from 3.90% of sales in FY 2013-14 to 17.40% in FY 2024-25.

The proposed transactions maintain the company's strategic alignment with global 3M operations while ensuring compliance with regulatory requirements for material related party transaction approvals. All transactions are conducted on an arm's length basis following OECD Transfer Pricing Guidelines and applicable transfer pricing regulations.

Source: None/Company/INE470A01017/5dcf4392-20f0-46a3-b896-83a2ee59163b.pdf

3M India Limited announced mixed quarterly results for Q3 FY26 ended December 31, 2025, showcasing strong revenue growth offset by significant exceptional charges that led to a quarterly loss. The diversified technology company demonstrated resilience across business segments while navigating regulatory changes and tax settlements.

Financial Performance Overview

The company delivered robust top-line growth with total income reaching Rs 1,237.50 crores in Q3 FY26, representing a 12.7% increase from Rs 1,106.78 crores in the corresponding quarter of the previous year. However, exceptional items significantly impacted profitability during the quarter.

Exceptional Items Impact Results

The company's quarterly performance was significantly affected by exceptional items totaling Rs 74.57 crores. These charges primarily stemmed from the implementation of India's new labour codes, which became effective on November 21, 2025. The incremental impact on gratuity provisions amounted to Rs 74.57 crores, arising mainly from changes in wage definitions under the consolidated labour legislation.

Additionally, 3M India recognized substantial tax expenses related to an Advance Pricing Agreement (APA) with tax authorities. The company recorded tax expense of Rs 139.47 crores and related interest of Rs 31.49 crores during the quarter, following acceptance of the final draft APA approved by the Central Board of Direct Taxes on January 6, 2026.

Nine-Month Performance Shows Growth

For the nine months ended December 31, 2025, 3M India demonstrated strong overall performance despite quarterly challenges:

Segment-Wise Performance

All business segments registered year-on-year growth in Q3 FY26, demonstrating broad-based demand across the company's diversified portfolio:

Leadership Transition Announced

The Board of Directors announced a planned leadership transition with Managing Director Ramesh Ramadurai retiring effective March 31, 2026, after serving the 3M Group for over 36 years, including nearly seven years as Managing Director of 3M India.

Aseem Kuldip Joshi brings extensive experience from IBM, McKinsey, Eaton, Honeywell, and most recently served as CEO, India Business, at GMM Pfaudler from 2021-2025. He holds degrees in mechanical engineering, industrial and systems engineering, and an MBA from INSEAD.

Regulatory and Tax Developments

The company successfully resolved long-standing transfer pricing disputes through the APA covering financial years 2014-15 to 2022-23. This agreement, filed originally in March 2018, provides certainty for future tax compliance while settling historical litigation matters.

The implementation of India's four consolidated Labour Codes represents a significant regulatory shift, consolidating 29 existing labour laws. 3M India has proactively assessed and disclosed the financial impact, treating it as an exceptional item due to its material and non-recurring nature.