Shares of Khadim India rallied 4% during the afternoon session on 27 September after the company said it plans to separate its distribution business into a new wholly-owned subsidiary.

The company’s Board of Directors are set to meet on 29 September to consider and approve the Scheme of Arrangement between the company and KSR Footwear ltd.

On 10 August, the company announced that it had received “in-principle approval“ to demerge its distribution business. The demerger will be done through a Scheme of Arrangement with a new wholly-owned subsidiary of the company.

According to the scheme, the entire shareholding of the company will be held directly by the shareholders of Khadim India in proportion to their shareholdings in Khadim.

The company was established in 1981 and started its business by whole-selling and distributing branded basic utility footwear. The company has a strong presence in 24 states and 3 union territories of India and is the second-largest footwear retailer in India.

At 3:30 pm, the shares of Khadim India closed at Rs 271.10 or 1.84% above its previous close on NSE.