India Resurgence Fund (IndiaRF), promoted by Piramal Enterprises Ltd. and Bain Capital Credit, along with affiliates, has announced an investment of up to ₹615 crore in Gujarat-based Setco Group, a maker of auto components.
As part of the transaction, Setco Automotive will transfer its clutch business into a subsidiary, Setco Auto Systems Private Ltd. (SASPL), in which IndiaRF will invest through a senior debt facility and pick up 35% equity stake.
“The investment proceeds will be used for growth capital and providing working capital to enable the businesses to grow on the back of anticipated recovery in the commercial vehicles market, meet the demand in the replacement market and re-finance / repay debt facilities,” IndiaRF said in a statement.
“Our partnership will drive a two fold strategy to restructure the balance sheet of the company as we also work closely with the promoters and management team, to drive rapid revenue growth and sustainable improvement in profitability,” Shantanu Nalavadi, managing director, IndiaRF, said.
“IndiaRF continues to remain focused on providing long term strategic solutions that enable an effective turnaround to profitability for high quality companies,” he said.
Harish Sheth, chairman and MD, Setco Automotive said, “We are certain that our combined efforts will help accelerate our ambitious growth trajectory towards improved performance and profitability benefiting all its stakeholders. IndiaRF’s investment will bring in significant strategic operational improvement in both SASPL and [casting subsidiary] Lava Cast.”
