Majestic Auto completes SHPL acquisition, eyes ₹29.28cr gain

The latest update from Majestic Auto

Majestic Auto Limited has completed the first phase of its acquisition of Sharan Hospitality Private Limited (SHPL), making SHPL a wholly-owned subsidiary. The acquisition is being executed under a resolution plan that received approval from the Hon'ble Supreme Court through an order dated July 17, 2026. Majestic Auto said the completion of the initial phase involved allotment of securities worth ₹40.00 crore. This first phase is structured to secure 100% control of SHPL's paid-up equity capital. The company’s update also laid out how the remaining steps will be executed in subsequent phases. A key element of the transaction is a planned transfer of securities to identified buyers after full completion. Based on the disclosed acquisition and sale values, Majestic Auto expects a pre-tax gain of about ₹29.28 crore.

Supreme Court clearance and the resolution plan backdrop

The Supreme Court order dated July 17, 2026, permitted Majestic Auto to implement SHPL’s resolution plan. The company disclosed that it received the order on July 23, 2026. This legal clearance followed a dispute process that included challenges by Axis Bank Limited, which were subsequently set aside by the NCLAT, after which the matter moved to the Supreme Court. Management also informed shareholders that a Consent and Dispute Settlement Agreement was executed with Assets Care & Reconstruction Enterprise Limited (ARC) on July 15, 2026. The agreement was taken on record by the Supreme Court on July 17, 2026, enabling implementation. Shareholder queries at the company level were reported to have significantly focused on the status of this resolution plan. With the legal process largely settled through the Supreme Court’s permission to proceed, Majestic Auto has now started executing the transaction steps.

What Majestic Auto completed in phase one

In the initial phase, Majestic Auto allotted securities worth ₹40.00 crore. This comprised 5 lakh equity shares and ₹35.00 crore in non-convertible debentures (NCDs). The equity allotment was described as 5 lakh shares at ₹100 each, which totals ₹5.00 crore. The NCD portion in this phase was ₹35.00 crore. According to the company, this action secured 100% control of SHPL’s paid-up equity capital, making SHPL a wholly-owned subsidiary. The update positioned this as the first tranche of a broader, multi-step plan. The remaining instruments and amounts are scheduled for subscription or extension in subsequent phases.

Full transaction structure: plan amount and interest

Majestic Auto disclosed that the total resolution plan amount is ₹105.43 crore. This total is split into ₹81.84 crore as the resolution plan amount and ₹23.59 crore as additional interest. In terms of funding structure, the company outlined two components. First is security subscription of ₹76.15 crore towards subscribing to SHPL securities. Second is an inter-corporate deposit (ICD) of ₹29.28 crore infused as an ICD, described as recoverable and not part of the sale consideration. The plan therefore combines an acquisition of securities and a recoverable deposit, while the eventual sale consideration is linked to the resolution plan total. The company also indicated that it has entered into a Securities Purchase Agreement with NovumLake Property Fund and 360 ONE Real Assets Advantage Fund to finance implementation.

Key instruments involved in the resolution plan

The company’s disclosure provided instrument-level details for what has been allotted and what remains. It included equity shares, multiple tranches of NCDs, bonus redeemable preference shares, and the ICD. The remaining NCD subscription was indicated as ₹36.15 crore to be subscribed in subsequent phases. It also disclosed that 50 lakh bonus redeemable preference shares are part of the structure. The ICD of ₹29.28 crore was presented as recoverable and separate from sale consideration. These components are central to how the acquisition is implemented and how the later transfer to the identified buyers is intended to occur.

Future steps and proposed transfer to funds

Majestic Auto stated that in subsequent phases it will subscribe to the remaining ₹36.15 crore in NCDs, receive 50 lakh bonus redeemable preference shares, and extend the ₹29.28 crore ICD. After the acquisition is fully completed, the company plans to transfer all securities to NovumLake Property Fund and 360 ONE Real Assets Advantage Fund. The company characterised the structure as an arbitrage-driven transaction. It disclosed that with an aggregate acquisition cost of ₹76.15 crore for the securities and a total sale consideration of ₹105.43 crore, it anticipates a pre-tax gain of approximately ₹29.28 crore. The disclosed gain aligns numerically with the ICD amount, but the company separately described the ICD as recoverable and not part of sale consideration.

Market snapshot and key corporate items cited

The stock identifiers were listed as NSE: MAJESAUT and BSE: 500267, with the sector tagged as Business Support. The share price was reported at ₹367.10 with a gain of ₹0.30 (0.08%) on BSE at 12:56 PM, and another data point stated the share price as on August 24, 2026 as ₹362.05. A “Holding Value” figure of ₹3.81784 crore was also shown in the provided data. Separately, the company was described as debt-free, with ₹135 crore in planned investments and progress on the SHPL resolution plan. On shareholder returns, the board approved a final dividend of 250% which equals ₹25 per equity share (face value ₹10) for FY2025-26, subject to shareholder approval. It also disclosed that a board meeting was scheduled for August 11, 2026 to consider and approve standalone and consolidated unaudited financial results for the quarter ended June 30, 2026.

Why the development matters for investors

For Majestic Auto, the key change is the shift from legal uncertainty to execution. The Supreme Court’s permission removed a major procedural hurdle cited in the company’s disclosures, allowing it to begin allotments and proceed with the payment framework embedded in the resolution plan. The company has outlined a defined acquisition cost for securities (₹76.15 crore) and a defined sale consideration (₹105.43 crore), with an indicated pre-tax gain of ₹29.28 crore if the planned transfer is executed as described. The subsequent phases will determine the timing of remaining subscriptions and extensions, including the balance NCDs and the ICD. The disclosures also clarify that the ICD is recoverable and not part of sale consideration, which is relevant when interpreting transaction cash flows. Investors tracking the stock will likely focus on completion of later phases and any updates on the proposed transfer to the two named funds.

Company context: business profile and SHPL asset

Majestic Auto was described in the provided material as operating facility management and rental services, focusing on commercial real estate leasing, factory space leasing, and facility management through subsidiaries in India. The text also noted the company’s earlier identity as Majestic Gears and its manufacturing of mufflers, fine blanking components, spokes, and spare parts for two-wheelers. SHPL was described as owning a commercial complex in Mumbai, which provides context to the resolution plan’s underlying asset. The transaction disclosures, including the staged securities subscriptions and subsequent transfer plan, sit alongside this real estate-linked background.

Closing summary

Majestic Auto has completed the first phase of its SHPL acquisition under a Supreme Court-approved resolution plan, resulting in SHPL becoming a wholly-owned subsidiary. The company has set out remaining subscription steps and a planned transfer of securities to NovumLake Property Fund and 360 ONE Real Assets Advantage Fund. Based on its disclosed security acquisition cost of ₹76.15 crore and sale consideration of ₹105.43 crore, it expects a pre-tax gain of about ₹29.28 crore. Further updates are expected as the company completes subsequent phases, including the remaining NCD subscription and the ICD extension.