AKCapital Services' record is fully disclosed and shareholder-approved, but the scale of related-party exposure and the gap between reported profit and operating cash deserve attention. The company is asking shareholders to approve related-party limits with seven promoter-controlled entities, including a proposed ₹6,500 crore limit with A. K. Capital Finance Limited that is over 113 times the SEBI materiality threshold of ₹57.19 crore, while operating cash flow has been deeply negative in two of the last three years.
Key findings
- Shareholder-approved related-party limits have escalated to 22x turnover
Major- The 33rd AGM notice seeks approval for material related-party transactions with seven promoter-controlled entities. The proposed ₹6,500 crore limit with A. K. Capital Finance Limited alone is over 113 times the SEBI materiality threshold of ₹57.19 crore. During FY2025-26, the company provided a ₹275 crore corporate guarantee to AKCFL, subscribed to ₹100 crore of its preference shares, and dealt in ₹87.25 crore of securities, totaling ₹465 crore. - Dividends have risen 10x while operating cash flow turned deeply negative
Major- Dividend per share rose from ₹6 in FY2021-22 to ₹60 in FY2025-26, a 10x increase over four years. Operating cash flow was -₹258 crore in FY2026 and -₹478 crore in FY2025, against positive profit in both years, making CFO/PAT -2.26x and -5.48x. Dividend cash outflows grew from ₹3.96 crore in FY2023-24 to ₹34.32 crore in FY2025-26 while CFO fell from ₹202 crore in FY2024. - Consolidated audit relies on other auditors for 6 subsidiaries covering ₹3,695 crore of assets
Major- The FY2025-26 consolidated audit covers 7 subsidiaries, of which 6 were audited by other auditors, reflecting total assets of ₹3,695.49 crore and net profit after tax of ₹78.93 crore, with the principal auditor's opinion based solely on those reports. Key Audit Matters were reported in the standalone auditor's report for FY2025-26, FY2023-24, FY2022-23 and FY2019-20. The same structure recurred in prior years: ₹3,329 crore of assets in FY2024-25 and ₹2,980 crore in FY2023-24 covered by other auditors. - Borrowing capacity expanded while commercial paper outstanding rose to ₹117 crore
Major- Commercial Paper outstanding rose from ₹45 crore in March 2023 to ₹117 crore in March 2026. Shareholders approved at the September 13, 2025 AGM an increase in borrowing limits up to ₹3,000 crore and issuance of Commercial Papers up to ₹250 crore. A proposal at the 33rd AGM seeks to raise the CP issuance limit to ₹500 crore. The standalone Debt Equity Ratio improved from 1.51 to 0.96 over FY2025-26, attributed to decreased borrowings. - Goodwill is tested annually but no impairment has been recognised in seven years
Major- No impairment loss on non-financial assets was recognised in any year from FY2019-20 through FY2025-26. This includes FY2025 and FY2026, when consolidated operating cash flow was -₹478 crore and -₹258 crore respectively, against ₹202 crore in FY2024. Goodwill is tested for impairment at the end of each financial year. - SEBI issued an administrative warning in 2024 and a settlement order in 2025
Minor- On October 16, 2025, SEBI issued a Settlement Order covering the company and four subsidiaries in the matter of Dewan Housing Finance Corporation's non-convertible debentures, settled by neither admitting nor denying findings. On March 26, 2024, SEBI issued an administrative warning to the company regarding its merchant banking activities, with the company stating no impact on its operations. The company disclosed no significant or material regulatory orders impacting going concern status during FY2025-26.
What to watch
- MD remuneration vote. Special Resolution Item 13 at the 33rd AGM on 12 September 2026 seeks approval for Mr. Mittal's revised ₹30 lakh monthly salary, with his and Ms. Aditi Mittal's votes excluded.
- Final dividend approval. The recommended ₹22 per share final dividend for FY2025-26, adding ₹14.52 crore to ₹25.08 crore already paid, goes to shareholders at the 33rd AGM on 12 September 2026.
- Borrowing capacity vote. Shareholders vote on proposed ₹500 crore Commercial Paper and ₹100 crore preference share issuance at the 33rd AGM on 12 September 2026.
- Cash flow recovery. Whether operating cash flow recovers from the -₹258 crore FY2026 level in FY2026-27, given rising dividend commitments.
Bottom line: This is a disclosed and shareholder-approved record, but the approvals themselves are the story: related-party limits at 22x turnover, a mid-term pay rise for the Managing Director to a revised salary of ₹30 lakh per month, and dividends funded while operating cash flow runs deeply negative. The risk is concentrated in the gap between reported profit and cash generation, and in the scale of transactions with promoter-controlled entities. Watch the AGM votes on 20 August 2026 and whether operating cash flow recovers.