Shankara Building Products Limited (SBPL) has announced the successful demerger of its trading business into Shankara Buildpro Limited (SBL), following approval by the National Company Law Tribunal (NCLT), Bengaluru Bench, on August 21, 2025.
Demerger Structure
- SBPL’s Trading Business Undertaking has been transferred to SBL.
- Shareholders of SBPL will receive 1 fully paid-up equity share of ₹10 in SBL for every 1 fully paid-up equity share of ₹10 held in SBPL.
- Record Date: September 24, 2025.
Apportionment of Cost of Acquisition
SBPL has issued detailed guidance for shareholders on how to apportion their pre-demerger cost of acquisition of equity shares:
| Company | % of Cost of Acquisition |
| Shankara Building Products Ltd (SBPL) | 34.19% |
| Shankara Buildpro Ltd (SBL) | 65.81% |
| Total | 100% |
Example Provided by SBPL
- Pre-demerger shareholding: 50 shares in SBPL
- Original cost per share: ₹1,000
- Total acquisition cost: ₹50,000
- Post-demerger allocation:
- SBPL – ₹17,095 (34.19%)
- SBL – ₹32,905 (65.81%)
Tax Implications
- The demerger is not taxable under Section 47(vid) of the Income Tax Act.
- For capital gains purposes, the original acquisition date of SBPL shares will be considered for both SBPL and SBL shares post-demerger.
Regulatory & Compliance Measures
- SBPL has notified BSE Limited and NSE about the scheme.
- The company advised shareholders that the guidance is for general informational purposes and recommended consulting independent tax advisors for individual cases.
Shareholder Advisory
- Shareholders must carefully record the cost allocation for accurate tax planning.
- The company emphasized the importance of maintaining compliance with future capital gains calculations.
Summary
Shankara Building Products Ltd (SBPL) has demerged its trading business into Shankara Buildpro Ltd (SBL), with shareholders receiving 1:1 equity shares as of the record date, September 24, 2025. Post-demerger, 34.19% of acquisition cost is allocated to SBPL shares and 65.81% to SBL shares. The transaction is tax-neutral under Section 47(vid), with the original purchase date considered for capital gains.
Disclaimer:
This article is intended solely for educational and informational purposes. The securities or companies mentioned are provided as examples and should not be considered as recommendations. Nothing contained herein constitutes personal financial advice or investment recommendations. Readers are advised to conduct their own research and consult a qualified financial advisor before making any investment decisions.
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