Setco Automotive Receives Warning Letters from BSE and NSE for Regulatory Non-Compliance

Setco Automotive has received warning letters from both BSE Limited and National Stock Exchange of India Limited for failing to comply with SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The regulatory action stems from the company's non-compliance with Regulation 19(3A), which mandates that the Nomination and Remuneration Committee must meet at least once during each financial year.

Warning Letters from Stock Exchanges

The company received formal warning communications from both major stock exchanges within a day of each other. BSE Limited issued its warning letter on January 06, 2026, while the National Stock Exchange of India Limited followed with its warning letter on January 07, 2026.

Exchange	Warning Date	Reference Number
BSE Limited	January 06, 2026	LIST/COMP/SHB/658/2025-26
NSE Limited	January 07, 2026	NSE/LIST/COMP/SETCO/01/2025-2026

Both exchanges identified the violation through their review of the company's Corporate Governance Report submitted for the year ended March 2025. The exchanges noted that no meeting of the Nomination and Remuneration Committee was held during Financial Year 2024-25, constituting a clear breach of regulatory requirements.

Regulatory Requirements and Violation

Regulation 19(3A) of SEBI (LODR) Regulations, 2015, explicitly states that "The Nomination & Remuneration Committee shall meet at least once in a Financial Year." This requirement is fundamental to maintaining proper corporate governance standards and ensuring adequate oversight of nomination and remuneration matters.

The stock exchanges emphasized the seriousness of this non-compliance in their warning letters. BSE stated that "the aforesaid non-compliance on your part has been viewed seriously," while NSE noted that "the aforesaid non-compliance on your part is viewed seriously."

Company Response and Corrective Measures

Setco Automotive has acknowledged the regulatory observations and committed to implementing immediate corrective measures. The company stated that it has "initiated immediate corrective measures to ensure that the Nomination and Remuneration Committee meets at least once every financial year, in strict compliance with SEBI LODR Regulations."

The company has also strengthened its internal compliance framework to prevent future lapses:

Enhanced internal systems for compliance monitoring
Strengthened mechanisms to ensure regulatory adherence
Reaffirmed commitment to maintaining highest corporate governance standards

Disclosure and Board Action

As required by both stock exchanges, Setco Automotive has disclosed the warning letters to the market pursuant to Regulation 30 of SEBI (LODR) Regulations, 2015. The company is also required to place these warning letters before its Board of Directors along with details of corrective measures taken to avoid such lapses in the future.

Both exchanges have cautioned that any future deviations will be viewed with utmost seriousness and may attract appropriate regulatory action as deemed necessary. This warning serves as a reminder of the importance of strict adherence to all applicable exchange circulars, guidance notes, and regulatory communications.

1 Day	5 Days	1 Month	6 Months	1 Year	5 Years
-1.30%	-7.83%	-7.54%	-19.39%	-22.95%	+11.31%

Setco Automotive Ltd has reported mixed financial results for the quarter ended September 30, 2025, with a stark contrast between its standalone and consolidated performance.

Standalone Performance

On a standalone basis, Setco Automotive posted a profit of Rs 19.00 lakhs for the quarter. This represents a significant decrease from the previous quarter (June 30, 2025), where the company reported a profit of Rs 99.00 lakhs. Despite the decline, the company's standalone performance shows resilience in challenging market conditions.

Consolidated Results

However, the consolidated picture paints a different story. Setco Automotive's consolidated operations recorded a substantial loss of Rs 4,127.00 lakhs for the quarter. This loss is primarily attributed to the underperformance of the company's subsidiaries.

Key Financial Highlights

Particulars (Rs. in Lakhs)	Q2 FY2026 (Consolidated)	Q2 FY2026 (Standalone)
Revenue from Operations	17,901.00	24.00
Total Income	18,013.00	52.00
Total Expenses	22,255.00	33.00
Profit/(Loss) before tax	(4,130.00)	19.00
Net Profit/(Loss)	(4,127.00)	19.00

Subsidiary Concerns

The company disclosed that its subsidiaries face material uncertainty with negative net worth. This situation has significantly impacted the group's overall financial health and contributed to the consolidated losses.

Debt Restructuring

In a move to address its financial obligations, Setco Automotive has extended the maturity of its non-convertible debentures worth Rs 57,450.00 lakhs to December 1, 2025. This extension may provide the company with some breathing room to improve its financial position.

Market Implications

The contrasting results between standalone and consolidated performances highlight the challenges Setco Automotive faces in managing its subsidiaries effectively. Investors and stakeholders may need to closely monitor the company's strategies to turn around its underperforming units and improve overall group performance.

As the automotive sector continues to face headwinds, Setco Automotive's ability to navigate these challenges and return its subsidiaries to profitability will be crucial for its long-term financial health and market position.