Majestic Auto Limited has completed the first phase of its acquisition of Sharan Hospitality Private Limited (SHPL), making the hospitality firm a wholly-owned subsidiary. The move follows a July 17, 2026, order from the Hon'ble Supreme Court approving the resolution plan.

The company allotted ₹40 crore worth of securities in this initial phase, comprising 5 lakh equity shares and ₹35 crore in non-convertible debentures (NCDs). This action secures 100% control of SHPL's paid-up equity capital.

Transaction Structure

The total resolution plan amount is ₹105.43 crore, split into ₹81.84 crore for the plan amount and ₹23.59 crore as additional interest. The funding structure involves:

• Security Subscription: ₹76.15 crore towards subscribing to SHPL securities.
• Inter-Corporate Deposit (ICD): ₹29.28 crore infused as an ICD, which is recoverable and not part of the sale consideration.

Future Steps

In subsequent phases, Majestic Auto will subscribe to the remaining ₹36.15 crore in NCDs, receive 50 lakh bonus redeemable preference shares, and extend the ₹29.28 crore ICD. Upon full acquisition, the company plans to transfer all securities to NovumLake Property Fund and 360 ONE Real Assets Advantage Fund.

What the Numbers Show

The transaction is structured to generate a clear arbitrage gain. With an aggregate acquisition cost of ₹76.15 crore for the securities and a total sale consideration of ₹105.43 crore, the company anticipates a pre-tax gain of approximately ₹29.28 crore. This gain mirrors the exact value of the ICD infusion, indicating that the profit mechanism relies on the recovery of the deposit alongside the sale of equity and debt instruments at a premium over the initial subscription cost.

SHPL reported a turnover of ₹64.54 lakh for FY25, contributing 1.01% to Majestic Auto’s consolidated revenue. The target entity operates in the hospitality sector, specifically in maintenance and leasing of immovable property.

Majestic Auto Limited concluded its 53rd Annual General Meeting (AGM) on August 17, 2026, with shareholders approving the adoption of the audited standalone and consolidated financial statements for the fiscal year ended March 31, 2026. The meeting, chaired by Chairman and Managing Director Mahesh Munjal, was conducted via video conferencing from the company’s registered office in New Delhi.

Shareholders representing 81,51,861 equity shares voted at the meeting, which had a record date of August 10, 2026, with a total of 10,262 shareholders on record. In addition to adopting the financials, members approved the confirmation of the interim dividend payment and the declaration of the final dividend for FY26. The re-appointment of Joint Managing Director Aayush Munjal as a director liable to retire by rotation was also approved via ordinary resolution.

Voting Results Breakdown

The voting data reveals strong promoter participation alongside significant retail engagement. Promoters holding 77,98,108 shares voted entirely in favor of all resolutions via e-voting. Public non-institutional shareholders holding 25,94,341 shares participated actively, casting 3,53,753 votes, representing a 13.64% turnout among this category. No votes were recorded against any of the three resolutions.

The scrutinizer for the meeting was Neeta Aggarwal of M/S Neeta A & Associates, appointed by the Board on May 23, 2026. The final report was issued on August 17, 2026.

Strategic Investments and Balance Sheet Status

During the question-and-answer session, management provided clarity on the company’s capital allocation strategy and balance sheet health. The company confirmed it is currently debt-free, providing a strong foundation for its upcoming expansion plans.

Management disclosed planned investments of approximately ₹135 crore over the next two years. These funds are earmarked for future growth projects, with the company actively evaluating potential opportunities. This investment horizon aligns with the company’s broader strategy to leverage its clean balance sheet for organic growth without incurring additional leverage.

Resolution Plan Progress

A significant portion of the shareholder queries addressed the status of the company’s Resolution Plan for Sharan Hospitality Private Limited (SHPL). The company had previously submitted a plan to take over SHPL, which owns a commercial complex in Mumbai. Following legal challenges by Axis Bank Limited, which were subsequently set aside by the NCLAT, the dispute moved to the Supreme Court.

Management informed shareholders that a Consent and Dispute Settlement Agreement was executed with Assets Care & Reconstruction Enterprise Limited (ARC) on July 15, 2026. This agreement, taken on record by the Supreme Court on July 17, 2026, enables the implementation of the Resolution Plan. The plan contemplates a payment of ₹81,84,10,538 towards the Resolution Plan Amount and ₹23,58,69,998 towards Additional Interest. To finance this implementation, Majestic Auto has entered into a Securities Purchase Agreement with NovumLake Property Fund and 360 ONE Real Assets Advantage Fund.

Operational Headwinds and Regulatory Status

Addressing macroeconomic factors, management noted that global tensions, specifically the conflict in Iran, have destabilized petroleum markets and impacted the rupee’s strength. The company stated it is taking appropriate measures to hedge against currency fluctuations.

Regarding the placement of the company’s scrip under ESM Stage 1 restrictions by NSE and BSE, management clarified that this action is based on automated criteria decided jointly by the exchanges and SEBI, rather than any specific action or omission by the company. As of August 10, 2026, the company employed 25 staff members.