CCI Approves Merger of 51 Malabar Gold Group Companies into Malabar Gold and Diamonds Limited

Background and Overview

The Competition Commission of India (CCI), in a press release issued on July 7, 2026, announced its approval of the merger of 51 Malabar Group companies with and into Malabar Gold and Diamonds Limited. This represents one of the largest group-level consolidation exercises in the Indian jewellery retail sector, bringing the entire Malabar Group's jewellery operations under a single flagship entity.

The proposed combination envisages the merger of 51 companies (referred to as the Transferor Companies) into Malabar Gold and Diamonds Limited (the Transferee Company). Most of the Transferor Companies are engaged in the jewellery business, and the consolidation is designed to simplify the group's corporate structure, improve operational efficiency, and strengthen Malabar Gold and Diamonds as the principal operating company of the group.

The Malabar Gold Group: A Brief Profile

Malabar Gold and Diamonds Limited is the flagship company of the Kozhikode (Kerala) headquartered Malabar Group. The company is engaged in the business of manufacturing, trading, retailing, wholesaling, supplying, distributing, importing, exporting, buying, franchising, and otherwise dealing in all kinds of gold, gold ornaments, diamonds, bullion, silver, platinum, precious stones, and other jewellery ornaments. It also acts as a dealer, agent, consignor, and consignee for lifestyle products made from jewellery and allied items.

The Malabar Group has established a significant presence in both domestic and international jewellery markets. As of 2026, the group operates over 400 showrooms across India and in multiple international markets including the UAE, Oman, Saudi Arabia, Qatar, Bahrain, Kuwait, Malaysia, Singapore, the United States, and the United Kingdom.

Scale and Scope of the Consolidation

The merger of 51 companies into a single entity is a substantial corporate restructuring exercise. The Transferor Companies include entities engaged in various aspects of the jewellery business, such as:

• Jewellery retail operations across different states and cities in India

• Manufacturing and processing units for gold, diamond, and other jewellery

• Wholesale and distribution operations

• International jewellery retail operations

• Ancillary and support services for the jewellery business

By consolidating these 51 entities into Malabar Gold and Diamonds Limited, the group aims to achieve several strategic objectives, including centralised governance, streamlined decision-making, improved financial reporting and transparency, and enhanced ability to raise capital for expansion.

CCI's Assessment and Approval

Under Section 5 of the Competition Act, 2002, certain combinations (mergers, acquisitions, and amalgamations) that exceed prescribed thresholds in terms of assets or turnover must be notified to the CCI for approval. The CCI evaluates whether the proposed combination is likely to cause an appreciable adverse effect on competition (AAEC) in the relevant market.

In the case of the Malabar Gold merger, the CCI approved the combination. Given that this was primarily an intra-group restructuring (consolidation of group companies under the flagship entity), the combination was unlikely to alter the competitive dynamics in the jewellery market. The market shares held by the individual entities, when aggregated, would be attributed to the surviving entity (Malabar Gold and Diamonds Limited), but the overall competitive position in the market would remain unchanged.

The Indian organised jewellery market is characterised by intense competition among several national and regional players, including Titan Company (Tanishq), Kalyan Jewellers, Joyalukkas, PC Jeweller, and numerous regional brands. The market is valued at approximately USD 90 billion and is projected to grow significantly over the coming years, driven by rising disposable incomes, urbanisation, and increasing preference for branded jewellery.

The Amended Merger Control Regime Under the Competition Amendment Act, 2023

The CCI's approval of the Malabar Gold merger comes against the backdrop of significant changes to India's merger control regime introduced by the Competition (Amendment) Act, 2023, which came into force on September 10, 2024. The key amendments relevant to merger control include:

Deal Value Threshold

The most significant amendment is the introduction of a deal value threshold (DVT) for merger notifications. Under the new framework, a combination must be notified to the CCI if the value of the transaction exceeds Rs 2,000 crore, provided that the target enterprise has "substantial business operations in India." This threshold is designed to capture acquisitions, particularly in the digital and technology sectors, where the target may have minimal assets or turnover but significant market influence.

Revised Asset and Turnover Thresholds

The asset and turnover thresholds for mandatory notification have been revised upwards to account for inflation and economic growth. The current thresholds require notification when the combined entity's assets exceed Rs 2,500 crore or turnover exceeds Rs 7,500 crore (for India-level thresholds).

Shortened Timeline for CCI Review

The amendment has reduced the CCI's initial review period from 30 working days to 20 calendar days for Phase I review. If the CCI does not issue a prima facie order within this period, the combination is deemed approved. This is intended to reduce uncertainty and facilitate timely completion of transactions.

Green Channel Route

The CCI's Green Channel route, introduced in 2019, allows certain categories of combinations (those not involving horizontal overlaps or vertical relationships) to be deemed approved upon filing. This route continues to be available under the amended regime and has been used by several group-level restructurings.

Competition Analysis in the Jewellery Market

India's jewellery market presents a unique competitive landscape. While the market is large and growing, it remains highly fragmented, with unorganised players (local jewellers) accounting for a significant share of the market. The key factors relevant to competition analysis in this sector include:

• Market Fragmentation: Despite the growth of organised players, unorganised jewellers continue to hold a substantial market share, particularly in Tier 2 and Tier 3 cities and rural areas.

• Brand Competition: Among organised players, competition is intense, with brands competing on trust, purity assurance, design, pricing, and retail experience.

• Regional Dynamics: The jewellery market has strong regional dynamics, with certain brands dominating specific geographies. Malabar Gold has a particularly strong presence in South India and the Middle East.

• Entry Barriers: Entry barriers in the jewellery retail segment are relatively low for local players but significant for those seeking to establish a national branded presence, given the capital requirements and trust-building needed.

• Regulatory Factors: The jewellery sector is subject to hallmarking requirements under the Bureau of Indian Standards (BIS) Act, GST compliance, and customs regulations for gold imports, all of which influence competitive dynamics.

Strategic Implications of the Merger

The consolidation of 51 group companies into Malabar Gold and Diamonds Limited has several strategic implications:

• Simplified Corporate Structure: The merger eliminates the complexity of managing 51 separate legal entities, reducing administrative overhead, compliance costs, and inter-company transaction complexity.

• Enhanced Financial Profile: A single consolidated entity presents a stronger financial profile for capital raising, credit rating purposes, and potential future listing on stock exchanges.

• Operational Efficiency: Centralised procurement, inventory management, and supply chain operations across the group can yield significant cost savings.

• IPO Readiness: Industry observers have speculated that the consolidation could be a precursor to a potential initial public offering (IPO) by Malabar Gold and Diamonds, although the company has not made any official announcement in this regard.

• Governance Improvement: A single entity allows for more effective corporate governance, unified board oversight, and streamlined regulatory reporting.

Regulatory and Compliance Considerations

A merger of this scale involves several regulatory and compliance considerations beyond CCI approval. The merger scheme would need to be approved by the National Company Law Tribunal (NCLT) under Sections 230 to 232 of the Companies Act, 2013. The NCLT evaluates the scheme from the perspective of fairness to shareholders and creditors, compliance with the Companies Act, and whether the scheme is in the public interest.

Additionally, the merger would need to comply with applicable tax laws, including the provisions of the Income Tax Act, 1961 relating to amalgamation (Section 2(1B)), which sets conditions for tax-neutral mergers. For the merger to qualify as a tax-neutral amalgamation, all the properties and liabilities of the Transferor Companies must be transferred to the Transferee Company, and the shareholders of the Transferor Companies must receive shares in the Transferee Company.

From a GST perspective, the merger may require fresh registrations or amendments to existing GST registrations across multiple states, given Malabar Gold's extensive retail presence. The transfer of assets, stock-in-trade, and ongoing contracts would also need to be structured in compliance with applicable stamp duty laws, which vary across states.

The Bureau of Indian Standards (BIS) hallmarking requirements must also be considered. Each showroom and manufacturing unit must hold valid BIS licences, and the transfer of these licences from the Transferor Companies to the Transferee Company must be arranged with the relevant BIS offices. Similarly, any import export code (IEC) registrations, jewellery export permits, and foreign trade licences held by the Transferor Companies would need to be transferred or re-issued in the name of Malabar Gold and Diamonds Limited.

Key Takeaways

• The CCI has approved the merger of 51 Malabar Group companies into Malabar Gold and Diamonds Limited, one of the largest group-level consolidations in the Indian jewellery sector.

• The merger is primarily an intra-group restructuring and is unlikely to have an adverse effect on competition in the jewellery market.

• The Competition (Amendment) Act, 2023 has introduced significant changes to India's merger control regime, including the deal value threshold and shortened review timelines.

• The Indian jewellery market remains highly competitive and fragmented, with organised and unorganised players coexisting across the value chain.

• The consolidation positions Malabar Gold and Diamonds for potential capital market access and enhanced operational efficiency as the group continues its domestic and international expansion.