Maiden Forgings Ltd Forensic Report - SOIC x StockScans Report

as of Sep 2026

Maiden Forgings Ltd's audit record is clean on its face, unqualified opinions in every year from FY23 through FY26, but the auditor's own annexures and the company's cash flow tell a more complicated story. The dominant risk is a ₹17.12 crore GST demand, roughly 3.4 times annual profit, which is contested but carried without any provision. Reported profits have also not converted into operating cash over time, and a meaningful share of bank debt is secured against assets titled to a director and a related entity rather than the company.

Key findings

  1. A ₹17.12 crore GST demand dominates contingent liabilities, contested with a stay Major - The company received a GST demand order dated 04.02.2025 from the Principal Commissioner, Meerut, for ₹17,12,07,370, which it is challenging before the Allahabad High Court. The court admitted the writ petition and granted a stay on 18 May 2025. No provision has been recognised in either FY2024-25 or FY2025-26, based on management and legal advisors' assessment. Smaller income tax demands of ₹4.40 lakh and ₹15.23 lakh, and ₹58.96 lakh recoverable from IndusInd Bank, are also carried without provision on management's confidence of recovery.
  2. Reported profits do not convert to operating cash flow over time Major - Cumulative operating cash flow of ₹15 crore equals only 0.46 times cumulative profit less other income of ₹33 crore over FY20-FY26. The pattern is uneven: CFO was negative ₹11.99 crore in FY24 against PAT of ₹9.72 crore, then ₹4.52 crore against ₹6.05 crore in FY25, and ₹6.22 crore against ₹5.02 crore in FY26. Free cash flow was negative in both FY24 and FY25. The company capitalised ₹2,666,252 of interest and ₹18,168,981 of trial-period development costs in FY2022-23.
  3. Reported borrowings are secured by assets titled to a director and a related entity Major - Bank of Baroda's exclusive first charge is secured by an equitable mortgage of properties whose registered deed is in the name of Director Mrs. Nivedita Garg. Axis Bank's charge includes land at C-118 Bulandshahr Road, whose title deed is in the name of Annapurna Meltors and Founders Pvt. Ltd., with possession and financial rights stated to be with the company. Both banks' working capital facilities are secured against hypothecation of entire current assets on a pari passu basis, plus personal guarantees of directors.
  4. Related-party dealings include director loans and a KMP-controlled counterparty Major - For FY ended 31.03.2026, loans to Whole-Time Director Nivodita Garg totalled ₹2.35 crore against an approved limit of ₹2 crore, with a closing balance of ₹1.17 crore. Sales to Rarecrout Ventures Private Limited, a related party, totalled ₹6.09 lakh with a closing balance of ₹8.68 lakh. In FY2022-23, ₹3.79 crore was restated as long-term advances to a director, previously classified as Fixed Asset. The FY2024-25 AOC-2 form disclosed one material arm's-length transaction: sale of goods of ₹2.68 crore to Rarepixel Ventures Pvt Ltd.
  5. Clean audit opinions sit alongside recurring control exceptions in the auditor's own CARO annexures Major - H G & Co. issued unqualified opinions for FY2023, FY2025, and FY2026, with no Emphasis of Matter in the FY2025 report. Yet the CARO annexure for FY2025 states title deeds of all immovable properties are held in the company's name except one property valued at ₹18 lakh. Grade-wise stock records were not maintained in FY2023 or FY2026, with closing inventory valued on physical verification certified by senior executives. The FY2025 CARO also states unspent CSR amounts were not transferred to a Special Account as required under Section 135(6).
  6. Promoter family controls the board and its reappointments Minor - Ms. Nivedita Garg, mother of the Managing Director, was reappointed at the 19th AGM on 30 Sep 2024 with 100% votes in favour and zero dissent. Mr. Nishant Garg was reappointed at the 20th AGM on 30 Sep 2025 with 99.9902% in favour. Promoter and Promoter Group voted 10,128,000 shares in favour, while Public-Institutions polled zero votes. Promoter holding stood at 71.97% with zero pledge. The FY2024-25 Board's Report left blank the required ratio of director remuneration to median employee remuneration.
  7. Regulator interactions are limited to a GST show-cause notice and a withdrawn allotment Minor - The company received a show-cause notice from the Commissioner (DGGI), Meerut, on 15 February 2025. A special resolution for a proposed preferential allotment was withdrawn because the proposed allottee was ineligible under Regulation 159 of the SEBI (ICDR) Regulations, 2018. The FY2023-24 Board's Report states no significant or material orders were passed by regulators impacting going concern.

What to watch

Bottom line: This is an audited record with clean opinions and zero promoter pledge, but the cash conversion, the security structure, and the related-party disclosures each carry a distinct risk. The GST demand is the largest single exposure and the stay is not a resolution. Read the balance sheet knowing that a portion of the collateral sits in a director's name, and watch the writ petition and the next AOC-2 filing for how these matters develop.