According to the latest reports, Shalimar Paints has approved a reverse merger with B2B building materials platform Infra.Market, marking a significant strategic expansion move. The merger will enable Infra.Market to enter public markets through the listed paints maker, with the transaction approved by the board on August 12. As per the company's official release, the proposed plan includes an investment in Hella Infra Market (the parent of Infra.Market) through a share swap arrangement, where shareholders of Hella Infra Market will receive shares and compulsorily convertible preference shares (CCPS) of Shalimar Paints as consideration. The deal remains subject to shareholder and regulatory clearances, with the company proposing to convene an extraordinary general meeting to seek shareholder approval for the transaction. If completed, the transaction would give Hella Infra Market shareholders collectively more than 77% of Shalimar Paints, effectively making the paints company the listed vehicle for the enlarged business.
The transaction involves significant capital restructuring, with Shalimar Paints planning to issue equity shares worth approximately ₹3,544.69 crore on a preferential basis to promoter and non-promoter allottees. Additionally, the company will issue up to 81.12 crore CCPS at ₹85 apiece, aggregating to approximately ₹6,895.22 crore. Both issuances will form part of the non-cash consideration for the proposed share swap. The proposed structure will significantly alter the scale and business profile of Shalimar Paints, as the company's market capitalisation of less than ₹750 crore is dwarfed by Hella Infra Market's* valuation of nearly ₹25,000 crore in the private market. The shares will be allotted to 185 investors through a preferential issue, with Infra.Market cofounders Aaditya Sharda and Souvik Sengupta among the largest proposed recipients of the CCPS. The non-cash transaction values the share swap at around ₹10,440 crore, although the final swap ratio will be determined based on valuation reports and will require shareholder approval.
The strategic decision to pursue a reverse merger rather than a standalone IPO was driven by challenging market conditions, as reported by Mint. "New age IPOs are not being treated well in the current market, and this deal with Shalimar gives Infra.Market the option to put its IPO off the table while still having a stock exchange play," a person involved in the transaction explained. The Strait of Hormuz crisis disrupted global commodity prices through its impact on oil and LNG trade, directly affecting Infra Market's tiles business operations. "In these circumstances, it made sense to, instead, float the acquisition through the listed company, leverage one unified platform, and then eventually raise funds via a Qualified Institutional Placement (QIP)," the person added. This approach represents a rare move among Indian startups, as no notable new-age Indian startup has so far gone public through a reverse merger with a listed group company in this manner.
According to Business Standard, Shalimar Paints reported a consolidated net loss of ₹21.26 crore in Q1FY27, compared with a net loss of ₹16.77 crore in Q1FY26, representing a 27% increase in losses year-on-year. The company's consolidated revenue declined 10.90% to ₹137.72 crore in Q1FY27, down from ₹154.56 crore in the corresponding quarter of the previous year. The operating profit margin (OPM) deteriorated to -8.84% in Q1FY27 from -4.94% in Q1FY26, while PBDT declined 32% to ₹-16.19 crore from ₹-12.22 crore year-on-year. Despite operational challenges, Shalimar Paints shares jumped 5% to hit upper circuit at ₹87.04 following the merger announcement, with the stock rising 41.18% year-to-date and 21.68% in the last 12 months.
As reported by CNBC TV18, the board has also approved a qualified institutional fundraise of up to ₹1,000 crore alongside the merger approval. The proposed fundraise is expected to provide additional capital to the enlarged business and support its expansion across manufacturing, distribution and technology. The transaction would bring together Shalimar Paints' manufacturing footprint and listed-company status with Infra.Market's technology-led distribution network across the building materials segment. Infra.Market, founded in 2016, has raised more than $800 million (around ₹7,600 crore) across multiple funding rounds and was last valued at about $2.7 billion (over ₹25,600 crore). The company first invested ₹270 crore in Shalimar Paints in 2022, later raising its holding to 52.85% and becoming its promoter. The deal effectively makes Shalimar Paints the listed vehicle for the enlarged business, with Infra.Market operating as an unlisted material subsidiary subject to shareholder and regulatory approvals. The structure helps Infra.Market bypass the conventional IPO process, as the company had confidentially filed for an IPO in September 2025 and received Sebi approval in January for a potential ₹5,000 crore offer.
