Purple Wave Infocom's FY2025-26 audit is clean: unqualified opinions, no CARO adverse findings, and no fraud or wilful default. The record, however, carries a material disclosure inconsistency over a ₹8.39 crore GST demand, persistently weak cash conversion, and a governance pattern where the promoter family dominates the board and related-party approvals.
Key findings
- A ₹8.39 crore GST demand is disclosed only via auditor emphasis, contradicting the company's own notes
Major- DGGI raised a GST demand of ₹8.39 crore for the period 01.04.2020 to 31.03.2025, pending adjudication, with no provision made as management believes the demand is not sustainable based on legal opinion. The auditor's report flags the impact as not ascertainable, yet the standalone financial statements state "Company does not have any contingent liability to the knowledge of the board" as of 31.03.2026. The consolidated statements also disclose no contingent liability as of 31.03.2026. - Operating cash flow has been weak or negative relative to profit in three of the last four reported periods
Major- The company reported net cash used in operating activities of ₹77.64 lakhs for the period ended 31 December 2024, 4.83 crore for FY2024, and ₹82.59 lakhs for FY2022, against net cash generated of 3.89 crore for FY2023. In FY2026, CFO was ₹-10.61 crore against PAT of ₹13.43 crore, a CFO/PAT ratio of -0.79x; in FY2025, CFO was ₹1.57 crore against PAT of ₹9.06 crore, a ratio of 0.17x. - Reported borrowings understate economic obligations through personal guarantees and director-owned property pledged as collateral
Major- A secured Cash Credit Facility from Canara Bank with a sanctioned amount of ₹1,500.00 Lacs carried outstanding amounts of 13.78 crore as of 31.12.2024, secured by hypothecation of book debts, equitable mortgages on residential properties at Gurgaon and Bhiwandi, and personal guarantees of Mrs. Sandhya Singh, Mr. Manoj Kumar Singh, and Miss Ananya Singh. Property owned by directors Ms. Sandhya Singh and Mr. Manojkumar Singh at Enigma Indiabulls, Gurgaon was given as collateral for an overdraft facility with Canara Bank. - The company seeks ₹30 crore of related-party limits while its own disclosures state no material RPTs occurred
Minor- The Board approved material related party transactions with Purplewave India Private Limited and Nano Theatre Private Limited, each up to ₹15,00,00,000 for FY 2026-27, subject to shareholders' approval, on 26 August 2026. The AGM notice dated 2 September 2026 seeks Special Resolutions for both limits. The FY2025-26 Annual Report states no material related party transactions occurred during the year as none exceeded 10% of turnover, and the consolidated notes list no transactions with related parties. - Promoter family dominates the board and has repeatedly capitalized reserves into bonus shares for themselves
Minor- Promoter shareholding stood at 71.92% as of the latest fiscal year, with pledge at 0.00%. Ms. Ananya Singh, aged 24 and related to MD Manoj Kumar Singh and WTD Sandhya Singh, attended 12 of 17 board meetings in FY 2025-26 and drew last drawn remuneration of Rs 1,33,333 per month. A bonus issue of 52,50,000 equity shares was allotted on October 09, 2024, capitalizing reserves, with Manoj Kumar Singh receiving 49,48,174 shares and Sandhya Singh receiving 3,01,784 shares. - A dormant Indian subsidiary was incorporated one day before year-end, while a UAE subsidiary was approved but not yet formed
Minor- Purple Wave Infocom Ltd incorporated its wholly owned subsidiary Nano Theatre Private Limited on 30 March 2026, one day before the FY2025-26 year-end, with authorized and paid-up capital of INR 1,00,000 total. Nano Theatre undertook no business activities during FY2025-26 and its bank account remained pending activation as of 31 March 2026. On 26 March 2026, the board approved incorporation of a wholly owned subsidiary in the United Arab Emirates, subject to regulatory approvals. - The FY2025-26 audit is clean across every dimension, with only a minor secretarial observation
Clean- ANDROS & CO. issued an unqualified opinion on the standalone financial statements as at 31 March 2026, with no qualification, reservation, adverse remark, or disclaimer. CARO reports state no fraud was noticed, the company has not been declared a wilful defaulter, and the ₹31.45 crore IPO proceeds were applied for their stated purpose. The secretarial audit report notes one exception: the company submitted the SDD certificate issued by its own Company Secretary to the Stock Exchange instead of the Practicing Company Secretary.
What to watch
- Shareholder votes on RPT limits. Resolutions 4 and 5, seeking ₹15 crore limits each for Purplewave India and Nano Theatre, are up for vote at the 19th AGM convened by notice dated 2 September 2026.
- DGGI adjudication outcome. The ₹8.39 crore GST demand was at adjudication stage as of the FY2025-26 reporting period, with the company's reply and any final demand order pending.
- Four GST show cause notices. Notices dated 26.05.2026 totaling ₹8,39,66,351 are answerable to the Additional Commissioner/Joint Commissioner of Central Tax & CGST Delhi West Commissionerate.
- Promoter lock-in expiry. The three-year promoter lock-in period from allotment of the IPO shares, as disclosed in the DRHP dated 5 December 2025, is set to expire.
- UAE subsidiary formation. Completion of the UAE subsidiary incorporation is subject to UAE regulatory approvals, as approved by the board on 26 March 2026.
Bottom line: This is an audited record with a clean statutory opinion and no fraud findings. The risk character is one of disclosure inconsistency and cash-quality: a material GST claim the company's own notes deny, and profits that have not converted to operating cash in three of four periods. Watch the shareholder votes on the ₹30 crore related-party limits and the DGGI adjudication outcome.