1. Mr. Aloke Lohia 2. Ms. Urmila Lohia — Combination C-2023/09/1055

Notice under Section 6(2) of the Competition Act, 2002 given by Mr. Aloke Lohia and Ms. Urmila Lohia

CORAM:

Ms. Ravneet Kaur Chairperson

Mr. Anil Agrawal Member

Ms. Sweta Kakkad Member

Mr. Deepak Anurag Member

Order under Section 31(1) of the Competition Act, 2002

1. On 27th September 2023, the Competition Commission of India (Commission) received a notice under Section 6(2) of the Competition Act, 2002 (Act), given by Mr. Aloke Lohia and Ms. Urmila Lohia (collectively “Acquirers”). The notice relates to a composite transaction envisaging acquisition of 20.51 percent equity shares of Indo Rama Synthetics (India) Limited (IRSL) by Mr. Aloke Lohia from Brookgrange Investment Limited (Brookgrange) (Brookgrange Shares) pursuant to a Share Purchase Agreement executed between Mr. Aloke Lohia and Brookgrange on 25th September 2023 (SPA); and transfer (by way of gift) of Brookgrange Shares by Mr. Aloke Lohia to Ms. Urmila Lohia pursuant to a gift deed to be prepared and executed after closing of the SPA (Proposed Transaction1).

2. In terms of Regulations 14(3) of the Combination Regulations, the Commission, vide communication dated 19th October 2023, sought certain information and clarifications regarding, inter alia, shareholding/control of IRSL, activities of IRSL, etc. The response was submitted by the Acquirers on 23rd October 2023. The Acquirers also made certain voluntary submissions on 1st November 2023.

3. IRSL is a public listed company. The promoters of IRSL include Mr. Om Prakash Lohia, Ms. Urmila Lohia, Mr. Vishal Lohia, Ms. Rimple Lohia (collectively, “O.P. Lohia Group”) and Mr. Aloke Lohia, Mr. Yashovardhan Lohia, Ms. Aradhana Lohia, Indorama Netherlands B.V.2and Brookgrange3 (collectively, “Aloke Lohia Group”). Based on the information on record, it is noted that around 15.51 percent shareholding of IRSL is held by O.P. Lohia Group and 59.33 percent shareholding of IRSL is held by Aloke Lohia Group while remaining shareholding is held by public. Further, citing the inter se arrangement as regards the control over the management and affairs of IRSL, the Acquirers submitted that IRSL is presently under joint control of O.P. Lohia Group and Aloke Lohia Group.

4. As observed, there are certain specificities of the Proposed Transaction which need to be considered before going into the assessment of the Proposed Transaction for any impact on market dynamics. The Commission observed that the Proposed Transaction would have the impact of increase in shareholding of O.P. Lohia Group to around 36 percent

1 An undertaking has been filed on behalf of Mr. Aloke Lohia (Undertaking), as per which it has been stated that within fifteen (15) working days of the Brookgrange Shares being credited in the demat account of Mr. Aloke Lohia, he will gift and transfer the same to Ms. Urmila Lohia to complete the Proposed Transaction. 2 Ultimately held by Indorama Ventures Limited (IVL) which is ultimately controlled by Mr. Aloke Lohia and his immediate family. 3 Mr. Aloke Lohia and Mr. Yashovardhan Lohia are indirectly ultimate beneficiaries of Brookgrange.

while the shareholding of Aloke Lohia Group would reduce to around 39 percent. As regards the rights etc., the Acquirers submitted that there will be no change in rights etc. and the only change that would result on account of the Proposed Transaction is change in shareholding of O.P. Lohia Group and Aloke Lohia Group in IRSL. Considering the same, the Commission observed that while at present IRSL is subject to positive control of Aloke Lohia Group and negative control of O.P. Lohia Group, post the Proposed Transaction, IRSL would be subject to negative control of its both promoter groups. However, the degree of control of O.P. Lohia Group is likely to increase post the Proposed Transaction with increase in shareholding while the rights, etc., remain unchanged. The Proposed Transaction has been assessed accordingly.

5. The Commission observed that IRSL is active in the manufacture and supply of polyester fibres and filaments. It manufactures and trades a broad range of polyester products viz., Polyester staple fibre (PSF), Polyester yarn (Polyester Partially Oriented Yarn or POY, highly drawn polyester filament yarn (FDY), fully drawn, fully oriented polyester multifilament yarn (DTY)) and Polyester Chips or Polyethylene Terephthalate Chips.

6. Based on the information submitted by the Acquirers, the Commission observed that Ms. Urmila Lohia and other members of the O.P. Lohia Group exercise control in Lohia Industries, IRR Holdings and Grace Ventures Private Limited (GVPL) apart from IRSL. However, as submitted, apart from GVPL, which had limited operations in trading of PSF supplied by IRSL, there are no overlaps between IRSL and other entities in which members of O.P. Lohia Group have interest. As noted, the linkages between GVPL and IRSL are also insignificant to cause any change in competition dynamics in any of the plausible relevant markets that could have been delineated for the purpose of assessment of the Proposed Transaction.

7. Considering the material on record including the details provided in the Notice and the assessment of the Proposed Transaction based on the factors stated in Section 20(4) of the Act, the Commission is of the opinion that the Proposed Transaction is not likely to have any appreciable adverse effect on competition in India. Therefore, the Commission approves the Proposed Transaction under Section 31(1) of the Act.

8. This order shall stand revoked if, at any time, the information provided by the Acquirers is found to be incorrect.

9. The information provided by the Acquirers shall be treated as confidential in terms of and subject to provisions of Section 57 of the Act.

10. The Secretary is directed to communicate to the Acquirers accordingly.