Majestic Auto Completes Strategic Divestment of Sharan Hospitality

Total consideration of Rs 105.43 crore received; Pre-tax gain of Rs 29.28 crore booked.

Reader Takeaway: The exit from Sharan Hospitality improves liquidity and provides a cash boost from asset liquidation.

What just happened

Majestic Auto Limited has officially completed the transfer of all securities held in its former wholly-owned subsidiary, Sharan Hospitality Private Limited (SHPL). The securities, which included equity shares, Non-Convertible Debentures (NCDs), and Bonus Redeemable Preference Shares, were acquired by NovumLake Property Fund and 360 ONE Real Assets Advantage Fund. The transaction was finalized on September 29, 2026, marking the formal completion of the company's resolution plan for SHPL.

Why this matters

The deal provides a significant influx of capital, with a total consideration of Rs 105.43 crore. Beyond the sale price, the company successfully recovered an Inter-Corporate Deposit (ICD) of Rs 29.28 crore. The transaction has resulted in a pre-tax gain of Rs 29.28 crore, which strengthens the firm's balance sheet and cash position. As SHPL is no longer a subsidiary, Majestic Auto has effectively offloaded an entity undergoing resolution, reducing potential operational complexities.

What changes now

SHPL ceases to be a subsidiary of Majestic Auto effective immediately. The company confirmed that this transaction does not involve any special rights for the purchasers, such as board representation or pre-emptive powers. Furthermore, the company clarified that the sale does not qualify as a related party transaction under current corporate governance norms.

What to track next

Investors should look for forthcoming management commentary or financial disclosures regarding the deployment of the Rs 105.43 crore inflow. The focus will now shift to how the company utilizes these proceeds—whether for debt reduction, core business growth, or other capital allocation strategies.