Krishna Capital and Securities Limited is an Ahmedabad-based **Non-Banking Financial Company (NBFC)**, registered with the **Reserve Bank of India (RBI)** since **March 27, 1998** (Registration No. **01.00176**). Categorized as a **Non-Deposit Accepting NBFC (Non-Systemically Important)**, the company is currently at a critical strategic inflection point, characterized by a total change in management control and a massive planned expansion of its capital base. --- ### **Core Financial Operations and Asset Management** The company operates within a single reportable business segment focused on financial services and capital market activities. Its revenue model is built upon four primary pillars: * **Capital Lending:** Provision of financing and credit facilities, which serves as the primary driver of **Interest Income**. * **Securities Trading:** Active participation in the capital markets through the trading of equity shares and other securities. * **Investment Management:** Maintenance of a strategic portfolio including interests in **mutual funds** and other financial instruments. * **Associate Interests:** The company holds a significant stake in one associate entity, **M/s. Palco Metals Ltd**, which impacts its consolidated financial performance. **Accounting Framework:** Financial assets are classified and managed under three distinct measurement categories to ensure transparency and regulatory alignment: 1. **Amortised Cost** 2. **Fair Value Through Other Comprehensive Income (FVOCI)** 3. **Fair Value Through Profit or Loss (FVTPL)** --- ### **Strategic Transformation: Change in Control and Management** As of **April 2026**, the company is undergoing a fundamental shift in ownership following a **Share Purchase Agreement (SPA)** dated **March 26, 2026**. * **New Leadership:** Control is transitioning from the existing promoters to new acquirers, **Mr. Ashu Bahusri (Ashu Bishnoi)** and **Mr. Ashishkumar Babubhai Agrawal (Yagnik Tank)**. * **Open Offer:** An Open Offer was triggered at **₹20.00 per share** to acquire up to **18,04,508** equity shares, representing **5.44%** of the **Emerging Voting Share Capital**. * **Board Reconstitution:** Upon completion of the transaction, the existing board—including Managing Director **Ashokkumar Babulal Agrawal**—will resign. The new acquirers will appoint a fresh board to oversee the company’s next growth phase. * **Management Continuity:** **Raj Kishor Kumar Gajjar** was appointed as **CFO** on **February 27, 2026**, to provide financial oversight during this transition. --- ### **Capital Overhaul and Fundraising Strategy** To facilitate a significant scaling of operations, the company is implementing a massive expansion of its equity and debt capacity. **Equity Expansion:** * **Authorized Capital:** Proposed increase from **₹4,00,00,000** to **₹34,00,00,000**. * **Preferential Issue:** The board has proposed the issuance of **3,00,00,000** equity shares at **₹20.00** per share (including a **₹10 premium**), aiming to raise **₹60 Crore**. * **Utilization of Funds:** The **₹60 Crore** infusion is earmarked for "Expansion by way of Investments" and general corporate purposes. **Debt Capacity:** * **Borrowing Limits:** The company is seeking shareholder approval to increase its borrowing powers up to **₹500 Crore** under Section 180(1)(c), signaling an intent to significantly leverage its balance sheet for future lending or acquisitions. **Projected Shareholding Structure (Post-Issue):** | Category | Pre-Issue Holding (%) | Post-Issue Holding (%)* | | :--- | :--- | :--- | | **Promoter & Promoter Group** | **42.87%** | **74.96%** | | **Public Shareholders** | **57.13%** | **25.04%** | | **Total Capital (Shares)** | **31,58,400** | **3,31,58,400** | *\*Calculated on Emerging Voting Share Capital; Acquirers are committed to maintaining the **25% Minimum Public Shareholding (MPS)**.* --- ### **Financial Performance Trends** The company has demonstrated strong top-line growth in its standalone operations, though consolidated profitability has been impacted by its associate holdings. **Standalone Financial Summary:** | Metric | FY 2024-25 | FY 2023-24 | FY 2022-23 | | :--- | :--- | :--- | :--- | | **Total Revenue (Rs. Lacs)** | **56.56** | **39.30** | **39.11** | | **Net Profit After Tax (Rs. Lacs)** | **10.29** | **13.83** | **14.04** | | **Transfer to Special Reserve (20%)** | **2.44** | **3.28** | **3.33** | **Consolidated Performance (with Palco Metals Ltd):** * **FY 2024-25 Consolidated Net Profit:** **₹0.97 Lacs** (a sharp decline from **₹14.91 Lacs** in FY 2023-24). **Dividend and Reserve Policy:** The company maintains a policy of **non-payment of dividends** to conserve capital for growth. In compliance with RBI mandates, it transfers **20% of net profit** to a **Special Reserve Fund** annually. --- ### **Operational Infrastructure and Governance** * **Internal Controls:** Operations are overseen by the **Audit Committee** and the **Board of Directors** to ensure compliance with RBI and SEBI guidelines. * **Asset Rationalization:** In **February 2026**, the board approved the sale of a vacant office property in **Ahmedabad**, reflecting a strategy to dispose of non-core assets. * **Physical Verification:** Management conducts regular physical verification of **Property, Plant & Equipment**; the company currently holds no **intangible assets**. * **Listing Details:** Listed on the **BSE** (**Scrip Code: 539384**; Group: **X**) with a marketable lot of **1**. --- ### **Risk Factors and Regulatory Compliance** Investors should note several risks associated with the current transition and historical compliance record. **1. Transactional and Strategic Risks:** * **Strategy Divergence:** The new acquirers operate in different business lines, creating uncertainty regarding the future operational focus. * **MPS Compliance:** Following the Open Offer, the acquirers' holding may temporarily exceed **75%**, requiring corrective action to restore the **25%** public float. * **Asset Disposal Restrictions:** Acquirers are prohibited from disposing of significant assets for **2 years** post-offer, except in the ordinary course of business. **2. Historical Compliance Lapses:** The company has a track record of administrative delays and reporting errors: * **Trading Window Closures:** Multiple delays (ranging from **1 to 22 days**) in closing the trading window under **SEBI (PIT) Regulations** between **2019 and 2022**. * **Disclosure Errors:** In **FY 2025-26**, a discrepancy was noted in reporting the acquisition of **97,200** shares (reported as **92,700**), leading to incorrect holding calculations. **3. Financial Viability:** * While auditors confirmed the company's ability to meet liabilities due within **one year** (as of **August 2023**), they noted this is not a guarantee of long-term viability. * The transition is subject to final approvals from **SEBI**, **RBI**, and relevant **Stock Exchanges**.