Majestic Auto has infused ₹75.79 crore into Sharan Hospitality Private Limited (SHPL) through the allotment of equity shares and non-convertible debentures (NCDs). This marks a significant step in implementing the Supreme Court-approved resolution plan for SHPL.

The infusion follows the Hon'ble Supreme Court order dated July 17, 2026, which mandated the implementation of the resolution plan. The total consideration for the acquisition is ₹1,05,42,80,536. Majestic Auto has now completed the first two phases of fund infusion.

Transaction Structure

The resolution plan outlines a specific mode of fund infusion:

• ₹76,14,80,536 towards subscription to various securities of SHPL
• ₹29,28,00,000 by way of an Inter-Corporate Deposit (ICD)

In the current phase, approved on September 1, 2026, the Monitoring Committee of SHPL allotted ₹35,79,00,000 worth of NCDs to Majestic Auto. This brings the total infused amount to ₹75,79,00,000.

What the Numbers Show

The capital structure of the infusion is heavily skewed towards debt instruments. Of the ₹75.79 crore infused so far, only ₹5 crore represents equity stake, while ₹70.79 crore is in the form of NCDs. This indicates that Majestic Auto’s initial exposure is primarily creditor-based rather than ownership-based, aligning with typical resolution applicant strategies to secure priority claims before full equity transfer.

Next Steps

Majestic Auto will complete the remaining infusion in subsequent phases. This includes:

• Subscribing to the balance 35,80,536 NCDs
• Receiving 50,00,000 bonus Redeemable Preference Shares
• Extending the ICD of ₹29,28,00,000

Upon completion, Majestic Auto plans to transfer all acquired securities to NovumLake Property Fund and 360 ONE Real Assets Advantage Fund. This transfer is subject to the fulfillment of conditions under the Securities Purchase Agreements and applicable laws. The company confirmed that these 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.