JioSaavn’s Game-Changing Merger Gets Nod from NCLT – Major Boost for India’s Leading Music Streaming Platform
The National Company Law Tribunal (NCLT) has given the green light for Saavn Holdings to merge with its group company, Saavn Media, which operates the JioSaavn audio streaming platform.
The approval means that Saavn Holdings, based in Delaware and a subsidiary of Saavn Media, will undergo the necessary procedures under Delaware state laws to complete the merger. Jio Platforms holds the majority stake in the company at 87.65%, while Saavn Holdings owns an 8.15% stake.
The Mumbai bench of the NCLT, consisting of Prabhat Kumar and VG Bisht, has mandated Saavn Media to submit the sanctioning order and scheme to the Registrar of Companies within 30 days. The scheme received approval from the NCLT on February 27, and the petition for the company scheme was filed in October 2023.
The bench also mentioned that the income tax department can investigate if any taxes are owed due to the plan, and appropriate action will be taken if it results in tax avoidance under the Income Tax Act. The main goal of the merger scheme is to streamline the group structure, reducing legal entities and achieving a more efficient organizational structure aligned with the parent company’s business.
Saavn Media aims to consolidate investments, minimize legal and regulatory compliance, administrative tasks, and record-keeping, ultimately leading to reduced expenditure.
JioSaavn, a prominent audio streaming platform with a music library of over 45 million songs, follows a hybrid revenue model of subscriptions and advertising. It faces competition from platforms like Spotify, Wynk Music, YouTube Music, and Prime Music. In the fiscal year ending March 2023, the company impaired its investment in Saavn Inc by Rs 1,068 crore. The impairment test on the subsidiary Saavn Inc resulted in a net recoverable value of Rs 698 crore.
