What's actually happening

Shalimar Paints' board has approved a plan to invest in Infra.Market's parent company, Hella Infra Market Ltd. Instead of paying cash, Shalimar will hand over its own shares and convertible preference shares (CCPS) to Infra.Market's existing investors and founders, in exchange for their stake in Hella Infra Market.

Once this share swap goes through, Hella Infra Market would become an unlisted subsidiary of Shalimar Paints. The two companies have also said they may fully "unify" into one entity later, subject to approvals - which is what would make this a true reverse merger. Through this structure, Infra.Market's business would effectively enter the stock market riding on Shalimar's existing listing, skipping the long and expensive IPO process.

The size of the deal

The total transaction is valued at roughly ₹10,440 - 10,545 crore. Here's the breakdown:

• Shalimar will issue about 41.7 crore new equity shares at ₹85 each (~₹3,545 crore) to 185 investors.
• It will also issue about 81.12 crore CCPS at ₹85 each (~₹6,895 crore).

Importantly, this isn't cash changing hands - it is shares being swapped based on independent valuations of both companies. The final ratio of how many Shalimar shares each Infra.Market shareholder gets is still to be worked out.

Who benefits?

Infra.Market's co-founders, Aaditya Sharda and Souvik Sengupta, are among the biggest recipients, each expected to get close to 29.6 - 29.7 crore CCPS. Other names on the list include investors like Nithin Kamath, Ashish Kacholia, Silverline Homes, and Trifecta Venture Debt Fund.

A fresh fundraise too

Alongside the swap, Shalimar Paints separately approved a plan to raise up to ₹1,000 crore through a Qualified Institutional Placement (QIP) - a way for listed companies to raise fresh capital from large institutional investors. This money is meant to fund growth once the combined company is bigger.

Why this route, and not an IPO?

Infra.Market had already received SEBI's approval for an IPO about seven months ago. But a reverse merger can be faster and simpler, since it uses an existing listed shell instead of running the full public-issue process from scratch. If completed, it would turn Shalimar - currently just a paints company - into a much larger, diversified "building materials platform" spanning ready-mix concrete, aggregates, steel, tiles, and more. 

Still just a proposal

Nothing is final yet. The deal needs shareholder approval, regulatory sign-offs, and a formal valuation exercise to fix the exact swap ratio. Shalimar's board has been asked to consider approving it "in principle" and to call a shareholder meeting next.