Majestic Auto has completed the full infusion of ₹1,05,42,80,536 into Sharan Hospitality Private Limited (SHPL) under its Supreme Court-approved resolution plan. The completion of the equity allotment on September 4, 2026, has made SHPL a wholly owned subsidiary of Majestic Auto.

The final phase of the transaction involved the allotment of 35,80,536 non-convertible debentures (NCDs) worth ₹35,80,536 and the disbursement of an inter-corporate deposit (ICD) of ₹29,28,00,000. This brings the total infused amount to the full consideration value mandated by the July 17, 2026, Supreme Court order.

Transaction Structure

The resolution plan required a total infusion of ₹1,05,42,80,536, split between security subscriptions and debt instruments. Majestic Auto has now fulfilled all components across three phases.

What the Numbers Show

The capital structure remains heavily skewed towards debt instruments. Of the total ₹1,05,42,80,536 infused, only ₹5 crore represents equity stake, while ₹71,14,80,536 is in the form of NCDs and ₹29,28,00,000 is an ICD. This indicates that Majestic Auto’s exposure is primarily creditor-based, aligning with typical resolution applicant strategies to secure priority claims before full equity transfer.

Next Steps

While the equity shares have been credited to Majestic Auto’s demat account, the corporate actions for the NCDs are pending. Upon completion, the company plans to transfer all acquired securities, including 50,00,000 bonus redeemable preference shares proposed for issuance, to NovumLake Property Fund and 360 ONE Real Assets Advantage Fund. This transfer is subject to conditions under the Securities Purchase Agreements and applicable laws. The purchasers are not related parties to the promoter group.

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.