How to participate in a capital reduction on Zerodha

Tue, 12 May 2026 00:00:00 +0000

A capital reduction is a corporate action in which a listed company reduces its paid-up share capital. Capital reductions are used for several purposes:

To return surplus cash to shareholders (return of capital).
To write off accumulated losses against capital (loss absorption, with no cash return).
To restructure the balance sheet before a merger, demerger, or restructuring.
To reduce the face value of shares (face value reduction without cash return).

Capital reductions are governed by Section 66 of the Companies Act, 2013, and require approval from both the shareholders (by special resolution) and the National Company Law Tribunal (NCLT). After NCLT sanction, the company reduces its share capital by cancelling or buying back a portion of paid-up capital, or by reducing the face value per share.

Section 66 on WebNotes

How to participate in a capital reduction on Zerodha