Setco Automotive Limited has called an Extra-ordinary General Meeting (EGM) for April 25, 2026, to approve a comprehensive divestment strategy and corporate restructuring plan that will fundamentally transform the company's business operations and identity.

Major Divestment Transaction

The centerpiece of the proposed transactions involves the complete sale of the company's stake in its material subsidiary, Setco Auto Systems Private Limited (SASPL), to RSB Transmissions (I) Limited. The transaction structure includes multiple components designed to maximize value realization for shareholders.

The initial consideration of approximately INR 185 crores will be subject to customary closing adjustments, including a holdback amount of INR 10 crores. The company will also be entitled to deferred consideration based on SASPL's EBITDA performance for the period from June 1, 2025, to May 31, 2026, calculated as 7x the differential between actual EBITDA and the agreed base threshold.

Strategic Rationale and Structure

The divestment addresses multiple strategic objectives, including the exit requirement for India Resurgence Fund, which had invested in SASPL in 2021 through equity instruments and non-convertible debentures totaling INR 976 crores. The transaction will enable SASPL to repay its debt obligations to the fund while providing the company with substantial liquidity for future operations.

RSB Transmissions (I) Limited, the acquirer, is described as a rapidly expanding global engineering enterprise specializing in propeller shafts, axles, and automotive components for commercial vehicles, passenger cars, and construction equipment. Upon completion, RSB Transmissions will acquire 76% control of SASPL, with the remaining 24% to be transferred through call and put option mechanisms.

Corporate Identity Transformation

The EGM will also consider changing the company name from "Setco Automotive Limited" to "Shilayan Industries Limited." This change reflects the loss of trademark rights to the "Setco" brand, which is owned by SASPL and will transfer to the new owners as part of the transaction.

Revised Business Focus

Corresponding with the name change, shareholders will vote on altering the company's object clause to focus on:

• Manufacturing and trading of ferrous and non-ferrous metals, castings, and cast iron products
• Automotive and engineering industry components
• Electronic clutch (e-clutch) systems and related automotive components
• Steel products including ingots, bars, rods, and specialized steel sections

This strategic pivot aligns with the company's non-compete obligations and positions it to leverage its existing capabilities in metals and casting operations through its wholly-owned subsidiary, Lava Cast Private Limited.

Governance and Voting Structure

The meeting will be held at the company's registered office at Baroda-Godhra Highway, Kalol (Panchmahals), Gujarat, at 2:00 p.m. IST on April 25, 2026. The cut-off date for determining voting rights is April 17, 2026. Remote e-voting will be available from April 22-24, 2026.

In the interest of good corporate governance, the company has decided to apply related party transaction voting principles, requiring approval from minority public shareholders for the major transaction items. This approach ensures transparency despite the significant involvement of promoters Mr. Harishkumar Kiritkant Sheth and Mr. Udit Sheth in the proposed transactions.

Financial Implications

The transaction is expected to generate substantial cash flows for the company, with management indicating intentions to declare dividends to shareholders following the completion of the divestment and the proposed amalgamation of Lava Cast Private Limited into the company. The supply agreement ensures continued business relationships, with LCPL reserving 1,000 MT per month of manufacturing capacity exclusively for SASPL for 18 months.

The comprehensive restructuring represents a strategic transformation from automotive components manufacturing to metals and casting operations, positioning the company for a new phase of growth in industrial materials and specialized automotive technologies.

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.