Setco Automotive Limited has informed the Exchange regarding Outcome of Board Meeting held on March 28, 2026.
SETCO · price
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Setco Automotive's board has approved selling its material subsidiary Setco Auto Systems (SASPL) to RSB Transmissions (I) Limited in a multi-stage deal. In Phase 1, the company will sell 4,47,847 shares (about 41% of SASPL) for approximately Rs 185 crore upfront, with a deferred EBITDA-linked component capped at Rs 71 crore. The remaining 24% stake (2,62,153 shares) will transfer by FY2027-28 for up to Rs 255 crore, subject to EBITDA milestones. A 3-year non-compete agreement brings another Rs 70 crore, and the promoter group will stop using the 'Setco' brand. Since SASPL contributed 96% of revenue (Rs 663 crore) in FY25, this is effectively a sale of the core clutch business. The company will rename itself 'Shilayan Industries Limited' and keep only Lava Cast (its 25,000 MT casting unit) under its fold. An EGM is scheduled for April 25, 2026 for shareholder approval.
Existing shareholders will vote on a transformative deal that trades the bulk of the company's revenue for sizeable cash inflows (potentially over Rs 500 crore across all components). The stock is likely to see sharp volatility as investors reassess the drastically smaller, renamed 'Shilayan Industries' entity going forward.