Systematic Industries Limited has entered into a Share Purchase Agreement (SPA) to acquire 100% equity of Wire Brigade Industries Private Limited (WBIPL). The transaction, executed on October 19, 2026, involves the purchase of 10,000 equity shares from Veritas Industries Private Limited (VIPL) for a total consideration of ₹21.50 crore.

The acquisition will make WBIPL a wholly owned subsidiary of Systematic Industries. The consideration structure includes both cash payment and a share swap mechanism, reflecting a mixed funding approach for this related-party transaction.

Transaction Structure and Consideration

The SPA stipulates that Systematic Industries will acquire 10,000 equity shares of WBIPL at a price of ₹21,500 per share. The total aggregate value of the acquisition stands at ₹21,50,00,000. The payment method is split between cash and non-cash components.

Under the share swap arrangement, Systematic Industries will issue and allot 9,42,600 fully paid-up equity shares to VIPL on a preferential basis. These new shares have a face value of ₹10 each and an issue price of ₹228 per share. This issuance corresponds to the acquisition of 9,996 equity shares of WBIPL. The remaining 4 equity shares of WBIPL will be acquired for cash.

Related Party Disclosure

Both WBIPL and VIPL belong to the Promoter Group of Systematic Industries. Consequently, the transaction qualifies as a related party transaction. The company disclosed that the deal will be executed at arm's length. Prior to this agreement, Systematic Industries held no shareholding in either VIPL or WBIPL. Post-completion, subject to applicable laws, the company will hold 100% of WBIPL's equity.

Regulatory Approvals and Timeline

The acquisition is subject to requisite approvals for the preferential issue of new equity shares. This disclosure was made under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The intimation follows an earlier communication made on September 8, 2026. The information is also available on the company's website.

What the Numbers Show

The transaction reveals a significant valuation premium embedded in the share swap component. While the acquisition price for WBIPL shares is fixed at ₹21,500 per share, the corresponding share swap values Systematic Industries' own equity at ₹228 per share against a face value of ₹10. This implies that the acquirer is issuing its own stock at a 22.8x multiple of face value to fund the majority of the purchase, effectively diluting existing shareholders to consolidate a promoter group entity into its corporate structure without immediate large-scale cash outflow.

Systematic Industries Limited shareholders unanimously approved a ₹33.94 crore preferential issue at the Extra Ordinary General Meeting held on October 1, 2026, with 100% of votes polled cast in favour and zero votes against.

The sole agenda item, Resolution No. 1, sought approval to create, offer, issue, and allot up to 14,88,600 equity shares of face value ₹10 each at an issue price of ₹228 per share, including a premium of ₹218 per share. The resolution was classified as a Special Resolution under the Companies Act, 2013, SEBI (ICDR) Regulations, 2018, and SEBI (LODR) Regulations, 2015. The meeting was chaired by Siddharth Rajendra Agarwal, Managing Director and Chairman.

Voting results

As per the Scrutinizer's report dated October 2, 2026, submitted by CS Murtuza Mandorwala of M/s. Murtuza Mandorwala & Associates, the consolidated voting results across all shareholder categories showed 16,569,242 votes polled out of 22,331,242 shares held, representing 74.19% of outstanding shares. Every vote polled was cast in favour of the resolution.

Remote e-voting was open from September 28, 2026, to September 30, 2026, with venue voting available at the meeting between 12:00 pm and 2:00 pm. The cut-off date for shareholder eligibility was September 25, 2026. National Securities Depositories Limited served as the e-voting agency. The votes were unblocked on October 1, 2026, around 2:57 pm in the presence of two witnesses.

Pricing basis and valuation details

The minimum price determined under Regulation 164(1) of the SEBI ICDR Regulations for frequently traded shares was ₹227.39, being the higher of the 90-trading-day volume-weighted average price of ₹208.96 and the 10-trading-day volume-weighted average price of ₹227.39 preceding the relevant date. An independent valuation by CA Sejal Agrawal of M/s. Procurve Valux Private Limited determined the fair value at ₹227.39 per share. The board fixed the final issue price at ₹228 per share. Since the allotment does not exceed 5% of the post-issue fully diluted equity share capital to any single allottee or group acting in concert, Regulation 166A(1) of the SEBI ICDR Regulations does not apply; however, a valuation report was required under Regulation 163(3) due to the non-cash consideration component.

Structure of the preferential issue

The preferential issue combines cash subscriptions with a share swap mechanism. Of the 14,88,600 total shares to be allotted, 5,46,000 are for cash subscription and 9,42,600 are for consideration other than cash.

Acquisition of Wire Brigade Industries

A significant portion of the issuance is tied to the acquisition of Wire Brigade Industries Private Limited (WBPIL). Systematic Industries plans to acquire 100% equity shareholding of WBPIL, making it a wholly owned subsidiary. Veritas Industries Private Limited, part of the promoter group, will transfer 9,996 equity shares of WBPIL in exchange for 9,42,600 new equity shares of Systematic Industries. A nominal amount of ₹86,000 will be paid in cash to acquire the remaining 4 equity shares of WBPIL. The balance cash proceeds of ₹12.44 crore will be utilised for working capital requirements.

What the numbers show

The unanimous approval, with 100% of polled votes in favour across all shareholder categories including public institutions and non-institutions, reflects broad-based shareholder support. Promoter group entity Veritas Industries Private Limited accounts for 63.32% of the total issue proceeds value via the share swap mechanism, indicating that the primary driver of the capital raise is the consolidation of assets within the promoter group's ecosystem rather than fresh external funding. While ₹12.44 crore is raised for working capital, the majority of the transaction value is internalised through the exchange of shares for the subsidiary's equity, converting private holding structures into listed entity ownership without significant cash outflow from the public market.