Majestic Auto unblocks ₹105 cr resolution after ARC settlement
A Supreme Court logjam had stalled NCLT-approved revival of Sharan Hospitality. Now Majestic Auto settled with ARC, lined up buyers, and awaits the top court's final nod.
— 1 earlier story on Majestic Auto Ltd. →What's new
- Signed consent settlement with ARC to revive Sharan Hospitality, ending a long legal deadlock.
- Supreme Court appeal by Axis Bank (whose assets were assigned to ARC) had blocked implementation – now removed.
- Separately entered SPAs to sell the incoming securities to NovumLake and 360 ONE, with escrow in place.
Why this matters
For a nano-cap with just ₹3 cr in quarterly sales and a recent CFO exit, a ₹105 cr payout – 26% of its market cap – is a bet-the-company move. If the Supreme Court signs off, the resolution could restructure the balance sheet. If it doesn't, the status quo remains.
What we're watching
- Supreme Court's final order on the settlement – the last remaining hurdle.
- Completion of securities sale to NovumLake and 360 ONE post-plan execution.
- Impact on cash flows and debt levels once the plan is implemented.
The full read
Majestic Auto has been stuck with a legal logjam on the Sharan Hospitality revival plan for months. NCLT had approved it, but a Supreme Court appeal by Axis Bank (whose assets later moved to Assets Care & Reconstruction Enterprise) blocked execution. That logjam just broke. On July 15, Majestic Auto signed a consent settlement with ARC, agreeing to pay ₹81.84 crore as the plan amount plus ₹23.59 crore in interest. That is ₹105.43 crore total, about 26% of its market cap. At the same time, it inked securities purchase agreements with NovumLake Property Fund and 360 ONE Real Assets Advantage Fund to sell the shares it will receive once the plan goes through, with escrow and funding already arranged. The one remaining condition is the Supreme Court's final order. For a nano-cap with just ₹3 crore in quarterly sales and a trailing net loss, this deal is either a turning point or a costly false start.
Questions answered
- What was the dispute about?
- The dispute involved the revival plan of Sharan Hospitality Private Limited. NCLT had approved Majestic Auto's resolution plan, but Axis Bank's appeal to the Supreme Court stalled its implementation. Axis Bank later assigned its financial assets to Assets Care & Reconstruction Enterprise (ARC).
- How much does Majestic Auto need to pay under the settlement?
- Majestic Auto agreed to pay ₹81.84 crore as the plan amount and an additional ₹23.59 crore as interest, totaling ₹105.43 crore – roughly 26% of its current market capitalisation.
- What happens once the Supreme Court approves?
- Once the Supreme Court gives its final order, Majestic Auto will complete the payout and receive securities as part of the resolution plan. It has already entered agreements to sell those securities to NovumLake Property Fund and 360 ONE Real Assets Advantage Fund.
- Why is this considered material for a nano-cap?
- Majestic Auto has a market cap of about ₹352 crore and trailing revenue that fell 76.6%. The ₹105.43 crore payout is over a quarter of its market cap – an enormous sum relative to its size.
- Is the settlement final?
- No. The settlement is contingent on the Supreme Court's final order. While it removes a major legal hurdle, the top court still needs to sign off before the plan can be executed.
- What if the Supreme Court rejects the settlement?
- If the Supreme Court does not approve, the settlement would likely collapse, and the Sharan Hospitality resolution plan would remain stalled, leaving Majestic Auto's payout and securities sale agreements void.
Majestic Auto Ltd.
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All notes on MAJESAUT →- 15 Jul 2026 · 11:07 PM IST Majestic Auto unblocks ₹105 cr resolution after ARC settlement
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