IndiaRF set to pump in ₹615 crore in Setco Group
India Resurgence Fund, promoted by Piramal Enterprises Ltd and Bain Capital Credit, invests capital in the form of both debt and equity by making distress-to-control investments across sectors other than real estate
PremiumMUMBAI : India Resurgence Fund (IndiaRF), promoted by Piramal Enterprises Ltd and Bain Capital Credit, said on Tuesday it will invest up to ₹615 crore in Gujarat-based Setco Group.
As part of the transaction, Setco Automotive Ltd will transfer its clutch manufacturing business into unit, Setco Auto Systems Pvt Ltd (SASPL). IndiaRF will invest in SASPL through a senior debt facility for a 35% equity stake.
Setco will use the proceeds of the investment for growth capital and also to fund its working capital needs to support business growth amid an anticipated recovery in the commercial vehicle market, meet demand in the replacement market and to either re-finance or repay debt, according to a statement.
“Our partnership will drive a twofold 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. IndiaRF continues to remain focused on providing long-term strategic solutions that enable an effective turnaround to profitability for high quality companies," said Shantanu Nalavadi, managing director, IndiaRF.
SASPL, a leading maker of clutches for medium and heavy commercial vehicles, recently diversified into manufacturing clutches for tractors. Setco Group also makes vehicle castings at a facility of its wholly-owned unit, Lava Cast Pvt Ltd
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