Lux Industries Limited (NSE: LUXIND | BSE: 539542)

Introduction

On 31 August 2026, Lux Industries Limited filed an announcement under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, informing the stock exchanges of the Board’s approval of a Scheme of Arrangement to de‑merge two of its business verticals into separate wholly‑owned subsidiaries.

Key Highlights of the Scheme

1. Purpose and Structure of the Demerger

• Vertical A Business (garments & hosiery manufacturing & trading) will be transferred to Lux and Cozi Limited (Resulting Company I).
• Vertical C Business (similar garment activities) will be transferred to Lux Global Limited (Resulting Company II).
• Vertical B will remain with the original (Demerged) company.
• Both subsidiaries were incorporated earlier in 2026:
  • Lux and Cozi Limited – 22 May 2026
  • Lux Global Limited – 18 May 2026

2. Share Entitlement Ratio

• Resulting Company I will issue 1 fully‑paid equity share (face value ₹2) for each 1 fully‑paid equity share (face value ₹2) held by Lux Industries shareholders on the record date.
• Resulting Company II will issue 1 fully‑paid equity share (face value ₹2) for each 1 fully‑paid equity share (face value ₹2) held by Lux Industries shareholders on the record date.
• No cash consideration is involved; the demerger is a pure share‑for‑share exchange.

3. Turnover Contribution of the Demerged Verticals (FY 2025‑26)

Business Vertical	Turnover (₹ Crores)	% of Total Turnover (₹ 1,373.59 Cr)
Vertical A	– (not separately disclosed)	46.77 %
Vertical C	– (not separately disclosed)	11.16 %

The figures illustrate the material share of the two demerged businesses in Lux Industries’ overall revenue.

4. Rationale for the Demerger

• Focused Management: Separate boards and management teams will enable dedicated oversight of each vertical.
• Operational Efficiency: Streamlined administration and targeted growth strategies for each business.
• Value Unlock: Independent platforms are expected to enhance shareholder value, improve capital allocation, and attract distinct investors and strategic partners.
• Governance: Clearer governance structures and continuity of leadership without disruption to ongoing operations.

5. Shareholding and Capital Structure

• The demerger does not alter the existing shareholding pattern of Lux Industries Limited.
• Post‑scheme, each shareholder will receive shares in the two resulting companies on a 1:1 basis.
• The pre‑scheme paid‑up share capital of the resulting companies will be cancelled and treated as a reduction of share capital under Sections 230‑232 of the Companies Act, 2013.

6. Listing and Regulatory Approvals

• Listing: Shares of Lux and Cozi Limited and Lux Global Limited are proposed to be listed on both BSE and NSE, subject to requisite approvals.
• Approvals Required:
  • Shareholders and creditors of the demerged and resulting companies
  • Hon’ble National Company Law Tribunal (NCLT)
  • Securities and Exchange Board of India (SEBI)
  • BSE and NSE
  • Other statutory and regulatory clearances as applicable

7. Timeline and Next Steps

• The Appointed Date for the scheme is the first day of the financial quarter in which the scheme becomes effective.
• Effectiveness will occur on the later of the dates on which certified copies of the sanction orders are filed with the Registrar of Companies (RoC) for each entity.
• Detailed information has been filed as Annexure‑A under Regulation 30 and will be made available on the company’s website: https://www.luxinnerwear.com/.

Conclusion

Lux Industries Limited’s Board has formally approved a demerger that separates its Vertical A and Vertical C businesses into two newly created subsidiaries, preserving existing shareholder equity on a 1:1 basis and aiming to unlock value through focused management and operational efficiencies. The scheme awaits the necessary statutory, regulatory, and shareholder approvals before the resulting entities can be listed on the BSE and NSE. Investors should monitor forthcoming approvals and the filing of the sanction orders for further updates on the implementation timeline.