Aditya Ispat Limited has announced a major strategic decision to divest its core manufacturing and trading operations through a slump sale arrangement. The board of directors, meeting on February 23, 2026, approved the sale of the company's non-alloy steel business to a promoter group entity for ₹36.76 crore.

Board Meeting Outcomes

The board meeting, held at the company's registered office in Hyderabad from 18:00 to 20:30 hours, addressed several critical business decisions. Following recommendations from the audit committee and after reviewing valuation reports, the directors approved the slump sale of the manufacturing and trading activity of non-alloy steel business on a going concern basis.

The consideration amount was determined based on the latest unaudited financial results for the quarter and nine months ended December 31, 2025, and will be subject to net working capital adjustments up to February 28, 2026.

Business Impact and Rationale

The audit committee emphasized the urgent need for this transaction, citing company survival concerns and the necessity to prevent further deterioration of net worth and share capital erosion. The committee noted difficulties in finding suitable purchasers for the entire undertaking due to high debt levels, leading to the decision to proceed with the related party transaction.

Regulatory Approvals and Implementation

The transaction requires shareholder approval through postal ballot, for which the board has initiated necessary preparations. Managing Director Aditya Chachan has been authorized to execute the Business Transfer Agreement post-shareholder approval, subject to regulatory consents and conditions precedent outlined in the agreement.

The board appointed several key service providers to facilitate the transaction:

• Tax and Regulatory Consultant: Ernst & Young LLP, Hyderabad
• Postal Ballot Scrutinizer: Manjeet Bucha (CP NO.4589), Practicing Company Secretary
• E-voting Platform: Central Depository Services (India) Limited

Related Party Transaction Details

As a related party transaction with promoter group company Jai Bapji Ispat Private Limited, the sale will be conducted at arm's length pricing. The transaction falls outside any scheme of arrangement and will be executed through a standalone Business Transfer Agreement, making it subject to Regulation 37A of SEBI LODR Regulations.

The postal ballot notice seeking shareholder approval will be circulated to shareholders in due course, marking a significant milestone in the company's restructuring efforts to address financial challenges and ensure operational sustainability.

Aditya Ispat Limited has formally disclosed the creation of pledge on 13.01 lakh equity shares by its promoters and promoter group members to Pillar Investment Company Limited. The pledge was created on February 12, 2026, as collateral for a Rs 1.25 crore loan availed by the company to reduce its bank exposure.

Pledge Details and Shareholding

The pledge encompasses shares held by both promoters and promoter group members, representing 24.32% of the company's total share capital. The disclosure was made under Regulation 31(1) of SEBI (Substantial Acquisition of Shares & Takeover) Regulations, 2011, with formal documentation submitted to the Bombay Stock Exchange on February 13, 2026.

Financial Structure and Security Cover

The pledged shares have a market value of Rs 1.30 crore against the loan amount of Rs 1.25 crore, providing a security cover ratio of 1.04. Pillar Investment Company Limited, classified as an NBFC, is the entity in whose favor the shares have been encumbered.

Regulatory Compliance and Corporate Information

The company has fulfilled its disclosure obligations under multiple SEBI regulations and circulars. The pledge was created for the benefit of the listed company, with funds to be utilized immediately for reducing bank exposure. The formal disclosure was signed by Mr. Aditya Chachan on behalf of all promoters and promoter group members.

The comprehensive disclosure includes detailed annexures specifying the pledge creation process, with the encumbered shares representing 100% of the total promoter shareholding and exceeding both the 50% promoter shareholding threshold and 20% of total share capital thresholds as per regulatory requirements.