Wadia Ghandy Advises Setco Automotives On Majority Stake Sale In Setco Auto Systems To RSB Transmissions

Wadia Ghandy & Co. has advised Setco Automotives Limited (SAL) and its promoters, Harish Sheth and Udit Sheth, on the sale of a majority stake in Setco Auto Systems Private Limited (SASPL) to RSB Transmissions, a company backed by Bain Capital.

The transaction marks a significant development in the automotive components sector, with RSB Transmissions acquiring management control of SASPL through a phased acquisition structure. In the first phase of the deal, RSB acquired approximately 41 percent of SASPL from SAL and around 35 percent from India Resurgence Fund (IndiaRF), resulting in a controlling stake in the company.

As part of the agreed structure, SAL’s remaining stake of nearly 24 percent in SASPL will be acquired by RSB during FY28. The consideration for this final tranche will be linked in part to the achievement of specified EBITDA milestones, aligning the transaction value with the company’s future performance.

The deal also facilitated the complete exit of India Resurgence Fund from its investment in SASPL. The fund had invested in the company in 2021, a transaction on which Wadia Ghandy had also advised SAL and its promoters. The latest mandate therefore represents a full-circle engagement for the firm, covering both the entry and eventual exit of the financial investor.

Wadia Ghandy’s role in the current transaction extended across all aspects of the deal, including transaction structuring, drafting and negotiation of documentation, legal due diligence, and assistance through signing and closing.

The transaction was led by Joint Managing Partner Ashish Ahuja and Partner Anubhav Agarwal, with support from Associates Sanjana Sahay and Amal Sindhu.

Partners Saswata Mitra and Aarish Dhunjibhoy, along with Associates Saswata Roy and Snigdha Mohapatra, assisted on diligence and other transaction-related matters.

The firm’s capital markets and regulatory aspects team, comprising Partners Sameer Pandit and Nidhi Jha, Senior Associate Krina Gandhi, and Associates Chandni T. and Aayushi Dhurvey, advised on SEBI-related issues connected with the transaction.

The acquisition strengthens RSB Transmissions’ presence in the automotive components industry while providing an exit opportunity for IndiaRF and a structured value realisation mechanism for Setco Automotives and its promoters.