Vadilal Industries said its 10-year distribution agreement with Vadilal Enterprises will not be renewed on the existing terms, after the latter failed to secure the required approval from its public shareholders.
The agreement, which governs the principal domestic sale and distribution of Vadilal Industries’ products, is set to expire on Sept 30, 2026.
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Following the development, Vadilal Industries shares fell 4.60% on Thursday, declining Rs 333.50 to Rs 6,923 apiece on the NSE. It further extended decline to settle 4.7% lower at Rs 6,915.5.
The company said Vadilal Enterprises informed it that it could not proceed with the renewal of the agreement on the current terms as it had not received the necessary approval from its public shareholders.
Vadilal Industries said the agreement had been placed before its own shareholders at the annual general meeting and was approved by its public shareholders.
The company manufactures ice creams, frozen desserts and other processed food products, with Vadilal Enterprises currently serving as the principal domestic sales and distribution channel in India under the agreement signed in September 2016.
Vadilal Industries said it has initiated appropriate steps to ensure continuity of business operations and minimise any adverse impact arising from the non-renewal of the agreement.
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The company added that it is taking necessary measures to safeguard the interests of the company and its public shareholders.
The disclosure was made under Regulation 30 of the SEBI Listing Obligations and Disclosure Requirements (LODR) Regulations, 2015.
The development comes ahead of the expiry of the existing arrangement on September 30, with the company now evaluating alternative measures to maintain the smooth distribution of its products in the domestic market.