Setco Automotive Limited has announced that its material subsidiary Setco Auto Systems Private Limited (SASPL) has approved significant waivers related to its unlisted Non-Convertible Debentures. The regulatory filing dated March 31, 2026, outlines comprehensive waiver approvals that will impact the subsidiary's financial obligations to debenture holders.

Waiver of Additional Redemption Premium

SASPL's board has approved the waiver of accrued Additional Redemption Premium for Financial Year 2025-26, subject to redemption of debentures within the stipulated timeline.

Comprehensive Investor IRR Waiver Details

The material subsidiary has approved a substantial waiver of accrued Investor IRR at 18% per annum on unlisted NCDs, covering both Financial Year 2024-25 and 2025-26.

Regulatory Compliance and Approvals

The waivers have been structured in accordance with applicable legal provisions and debenture agreements. All relevant debenture holders have agreed to the proposed waivers, and where applicable, the debenture trustee has provided consent in accordance with the Debenture Trust Deed and other transaction documents.

The company emphasized that there is no change in the principal amount or other key terms of the debentures, except for the approved waivers. This disclosure maintains transparency with stakeholders regarding the material subsidiary's debt restructuring activities and demonstrates the company's commitment to regulatory compliance.

Setco Automotive Limited has taken the next strategic step following its recent acquisition of Lava Cast Private Limited (LCPL) by approving a comprehensive scheme of amalgamation. The Board of Directors, in its meeting held on March 23, 2026, from 3:20 p.m. to 3:45 p.m., approved the draft Scheme of Amalgamation under Sections 230 to 232 of the Companies Act, 2013, which will merge LCPL into the parent company through absorption.

Recent Corporate Restructuring Timeline

The merger approval follows the company's successful completion of LCPL acquisition just three days earlier. On March 20, 2026, Setco Automotive's board had approved the acquisition of remaining equity stakes in LCPL:

Merger Scheme Details

The proposed scheme of amalgamation represents a merger by absorption, where LCPL will be completely integrated into Setco Automotive. Key aspects of the approved scheme include:

Financial Profile Comparison

The merger involves two entities with contrasting financial profiles as of March 31, 2025:

LCPL (Transferor Company)

Setco Automotive (Transferee Company)

Required Approvals and Regulatory Compliance

The scheme requires multiple statutory approvals before implementation:

Strategic Rationale for Merger

The amalgamation scheme aims to achieve comprehensive organizational restructuring with multiple strategic benefits:

• Simplified Corporate Structure: Combining business interests into a single entity
• Operational Efficiency: Reducing managerial overlaps across multiple entities
• Cost Optimization: Decreasing regulatory, legal, and administrative compliance costs
• Business Synergy: Consolidating operations to augment growth and unlock shareholder value
• Structural Simplification: Reducing multiple levels of business entities within the group

Business Operations Integration

Both entities operate in complementary automotive manufacturing segments. LCPL specializes in manufacturing basic precious and non-ferrous metals, including casting components for commercial and passenger vehicle segments. Setco Automotive focuses on hydraulics manufacturing and trading of clutches, brake linings, release bearings, flywheels, universal joint crosses, water pumps, and torque rod bushes for commercial vehicles, farm tractors, and construction equipment.

Related Party Transaction Status

The company confirmed that the proposed merger does not fall within related party transaction purview under Section 188 of the Companies Act, 2013, based on Ministry of Corporate Affairs clarifications. Additionally, under SEBI LODR Regulation 23(5)(b), transactions between holding companies and wholly-owned subsidiaries are exempted from specific regulatory requirements, streamlining the approval process.