IndiaRF to invest Rs 615cr in major automotive components group Setco, Auto News, ET Auto

Subsequently, IndiaRF and its subsidiaries will invest through a senior credit facility and a 35% stake in SASPL, IndiaRF said in a statement. IndiaRF is a distressed investment platform focused on India.

New Delhi: Piramal Enterprises and the India Resurgence Fund (IndiaRF), promoted by Bain Capital Credit, on Tuesday announced an investment of up to Rs 615 crore ($ 83 million) in auto components group Setco, based in China. Gujarat. The transaction will be carried out in two stages with Setco Automotive Ltd (Setco) transferring its clutches activity to its subsidiary Setco Auto Systems Pvt Ltd (SASPL).

Subsequently, IndiaRF and its subsidiaries will invest through a senior credit facility and a 35% stake in SASPL, IndiaRF said in a statement. IndiaRF is a distressed investment platform focused on India. “The proceeds from the investment will be used for growth capital and provide working capital to enable (SASPL) companies to grow through the expected recovery of the commercial vehicle market, to meet market demand. replacement and refinancing / repaying the facility debt, ”he added.

Commenting on the investment in Setco, IndiaRF Managing Director Shantanu Nalavadi said: “Our partnership will lead to a two-pronged strategy to restructure the company’s balance sheet, as we are also working closely with developers and management team, to generate rapid revenue growth and sustainable improvement in profitability. “

Our partnership will lead to a two-pronged strategy to restructure the company’s balance sheet, as we also work closely with the promoters and the management team, to generate rapid revenue growth and sustainable improvement in profitability.Shantanu Nalavadi, MD, IndiaRF

IndiaRF continues to focus on providing long-term strategic solutions that enable effective turnaround in profitability for high quality companies, added Nalavadi. Setco Automotive President and CEO Harish Sheth said IndiaRF’s investment will bring significant strategic operational improvement to both SASPL and Lava Cast, an integrated foundry and machined molding company.

“We are delighted to partner with IndiaRF at this critical juncture in Setco Automotive’s journey. We look forward to leveraging their proven global restructuring and turnaround expertise, and are confident that our combined efforts will help accelerate our ambitious growth path toward improved performance and profitability. benefiting all its stakeholders, ”he added.

Setco Group is focused on manufacturing and marketing commercial vehicle clutches for original equipment manufacturers (OEMs), including aftermarket restoration of OEM brands and independent aftermarket. It is also integrated upstream and manufactures castings through a wholly owned subsidiary, Lava Cast Pvt Ltd.

Setco was closed for eight months due to a strike between 1989 and 1990 and had to start over. After being under BIFR for 14 years, it has grown into the country’s largest commercial vehicle clutch manufacturer. Since then, the company has never had even an hour of lost production due to a labor issue. And also wooed the nation’s largest utility vehicle maker for a roughly 60% revenue share of the company. It also mitigated the risk of profitability instability through various measures. He is now looking to double his income over the next three years to Rs 1,000 crore.


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Richard V. Johnson

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