Galactico Corp Seeks Nod for ₹6.67 Cr Divestment to Meet SEBI Norms

Introduction

Galactico Corporate Services has initiated a postal ballot to seek shareholder approval for several key strategic resolutions, including the divestment of its majority stake in a subsidiary. The move is a direct response to new, stricter capital adequacy regulations mandated by the Securities and Exchange Board of India (SEBI), compelling the company to fortify its financial position and sharpen its focus on core merchant banking operations.

The Postal Ballot Resolutions

Following its board meeting on March 14-15, 2026, Galactico Corporate Services issued a notice outlining four resolutions for which it seeks approval through remote e-voting. The voting period is scheduled to commence on March 18, 2026, and will conclude on April 16, 2026. The results are expected to be announced by April 18, 2026.

The resolutions are critical for the company's strategic realignment and regulatory compliance.

Strategic Divestment of Seven Hills Beverages

The cornerstone of the proposal is the third resolution, which seeks a special approval for the sale of Galactico's entire 73.77% shareholding in its subsidiary, Seven Hills Beverages Limited. The stake, comprising 2,751,451 equity shares, is set to be sold to Mr. Ronak Shah and Group for a total consideration of ₹6.67 crore. This transaction values Seven Hills Beverages at approximately ₹9.05 crore.

Seven Hills Beverages is an unlisted entity engaged in manufacturing packaged drinking water for Bisleri International. Upon completion of the sale, expected by April 25, 2026, Galactico will lose control over the subsidiary and its step-down subsidiary, Palwe Pest Control Private Limited. The proceeds from this divestment are crucial for bolstering Galactico's capital base.

The SEBI Mandate Driving the Change

These strategic actions are necessitated by the SEBI (Merchant Bankers) Amendment Regulations, 2025, which came into effect on January 3, 2026. The new framework significantly increases the capital and liquid net worth requirements for merchant bankers, replacing the previous regulations from 1992. The old rules required a minimum net worth of ₹5 crore, but the amended regulations impose a much stricter, phased-in capital adequacy structure.

To comply, Galactico must first achieve a liquid net worth of ₹2.00 crore by December 31, 2026. The long-term requirements are even more demanding, with a mandated liquid net worth of ₹25 crore by January 2027 and ₹50 crore by January 2028 to maintain its Category I merchant banker status.

Financial Strategy and Future Outlook

The divestment is a pivotal step in Galactico's strategy to navigate this new regulatory landscape. By selling its non-core assets, the company aims to unlock capital, strengthen its balance sheet, and dedicate resources to its primary business of merchant banking and investment advisory services. The company also plans to restructure its other non-SEBI regulated businesses into a separate business unit by July 1, 2026, to streamline operations.

Another resolution seeks to modify the terms of debentures for its subsidiary, Instant Finserve Private Limited, to ensure the parent company's net worth is protected from subsidiary-level financial activities.

Key Transaction and Timeline Summary

Market Position and Inherent Risks

With a market capitalization of around ₹32.44 crore, Galactico Corporate Services is a smaller entity in the financial services sector, especially when compared to industry leaders. The company faces several risks. The foremost is regulatory adherence; failure to meet the ₹2.00 crore liquid net worth target by the end of 2026 could jeopardize its merchant banking license. Furthermore, the successful completion of the divestment is subject to shareholder approval and other closing conditions. The most significant long-term challenge will be securing the substantial capital required to meet the ₹25 crore and ₹50 crore net worth milestones in 2027 and 2028, respectively.

Conclusion

Galactico Corporate Services is at a critical juncture, undertaking significant corporate restructuring to align with a more demanding regulatory environment. The proposed divestment of Seven Hills Beverages is a necessary step to generate immediate capital and refocus the company's strategy. The outcome of the upcoming postal ballot will be decisive in determining the company's ability to comply with SEBI's new norms and sustain its operations as a Category I merchant banker in the long run.