Setco Automotive has finalized the purchase consideration for the divestment of its majority stake in material subsidiary Setco Auto Systems Private Limited (SASPL) at Rs 215 Crores. The transaction, executed with RSB Transmissions (I) Limited (Purchaser), was initially valued at approximately Rs 185 Crores in March 2026, based on SASPL’s financial position as on December 31, 2025. The final figure incorporates adjustments for net debt and working capital as on the closing date, resulting in a significant upward revision from the initial estimate.

The company intimated the stock exchanges under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, on July 31, 2026. This disclosure follows the successful closure of the transaction announced on May 28, 2026, when the sale securities were transferred to the Purchaser. The finalization of closing accounts allowed for the precise determination of the financial adjustments agreed upon in the Share Purchase and Subscription Agreement (SPSA).

Payment Structure and Adjustments

The total consideration of Rs 215 Crores was settled through a combination of upfront payment and holdback releases. On the closing date, RSB Transmissions paid Rs 207.6 Crores, retaining a holdback amount of Rs 10 Crores. This initial payment was based on estimated net debt and working capital figures.

Following the finalization of accounts, the remaining holdback was adjusted and released:

On July 29, 2026, the Purchaser released Rs 7.4 Crores from the holdback amount to the Company. The balance of Rs 2.6 Crores was adjusted against a downward revision in the purchase consideration, arising from the difference between the estimated and final net debt and working capital positions of SASPL as at the closing date.

Deferred Consideration Excluded

The disclosed final purchase consideration of Rs 215 Crores does not include deferred consideration previously detailed in the Company’s intimation dated March 29, 2026. This deferred portion remains payable subject to the specific terms and conditions outlined in the SPSA. The separation of immediate settlement from contingent future payments highlights the structured nature of the divestment, ensuring alignment between the buyer and seller on post-closing performance metrics.

What the Numbers Show

The increase from the initial estimate of Rs 185 Crores to the final Rs 215 Crores indicates that SASPL’s actual net debt and working capital position at closure was more favorable than anticipated in December 2025. Typically, lower net debt or higher working capital at closing results in an upward adjustment to the enterprise value transferred to the seller. This positive variance suggests improved liquidity or reduced liabilities within the subsidiary during the interim period, benefiting Setco Automotive’s exit valuation.

Setco Engineering Private Limited reduced its encumbered shareholding in Setco Automotive by releasing 32,283,970 equity shares on July 3, 2026. The release was executed by Vistra ITCL (India) Limited in its capacity as Debenture Trustee against Non-Convertible Debentures (NCDs) issued by Setco Auto Systems Pvt. Ltd. The lenders involved are India Resurgence Fund - Scheme 1 and India Resurgence Fund - Scheme 2, managed by India Resurgence Asset Management Business Private Limited. This disclosure was submitted to the stock exchanges on July 6, 2026, under Regulations 31(1) and 31(2) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011.

Promoter Shareholding and Encumbrance Details

The following table details the shareholding and encumbrance status of the promoters as of the reporting date:

The shares of Setco Automotive Limited are listed on the Bombay Stock Exchange and the National Stock Exchange of India. The release of encumbrance reduces the pledged portion of the promoter's holding while the overall shareholding quantity remains unchanged.