C2C Advanced Systems presents a record where reported profits are contradicted by deeply negative cash flows, and the deployment of IPO proceeds could not be verified by the monitoring agency. The limited-review report contains an emphasis-of-matter paragraph, and the company has a pattern of missed collection commitments on large foreign receivables.
Key findings
- IPO proceeds went to unverified vendors, and cash flows are deeply negative
Critical- Cumulative operating cash flow over FY21-FY25 was negative ₹157 crore, while cumulative profit less other income was ₹39 crore, yielding a ratio of -4.05 times [SQL]. ICRA’s monitoring report for the quarter ended 30 September 2025 stated that utilisation was neither in line with the offer objects nor approved by shareholders, and actual spending went to vendors different from those proposed. A complete end-to-end trail of proceeds could not be established because proceeds were credited to one operational account while disbursements were from another. - Revenue quality is undermined by chronic cash conversion failure and customer concentration
Major- Receivable days stood at 349 in FY25, 380 in FY24, and 408 in FY23. Management stated a commitment that approximately ₹66 crore from a Malaysian client was expected by 31 January 2026; by the Q4 FY26 transcript, collection was “Partially delivered” with the balance progressing through final commissioning milestones. A separate commitment that the receivables position would “look very strong by 31st March 2026” had also “Slipped,” with certain receivables spilling into early FY 2026-27. - Promoter shareholding increased through open-market purchases while the board and CFO changed
Minor- Promoter group shareholding rose from 40.82% to 41.31% between 3 March 2025 and 17 March 2025 through open-market acquisitions. Ms. Maya Chandra, a promoter related to the Managing Director, was appointed as Additional Director effective 24 December 2025. Mr. Murtaza Ali Soomar resigned as CFO effective 1 July 2025 and was replaced the same day. - The group had no associates, JVs, or subsidiaries in FY2024-25
Clean- C2C Advanced Systems Ltd had no associates, joint ventures, or subsidiary companies during FY2024-25. Management stated in March 2026 that the company is at an advanced stage of finalising a joint venture with OSI Maritime, a Canadian naval technology company.
What to watch
- Malaysian client receivable. Collection of the balance of the approximately ₹66 crore receivable was progressing through final commissioning milestones as of the Q4 FY26 transcript (Mar 2026).
- Receivables spillover. Settlement of receivables that spilled into early FY 2026-27, as acknowledged by management in the Q4 FY26 transcript (Mar 2026).
- RPT shareholder vote. Shareholder vote on material RPTs for FY 2026-27, as proposed in the notice dated 15 April 2026.
- NSE and SEBI proceedings. NSE review of the company’s March 2025 submission on BDO’s observations remains pending as of the FY 2024-25 Annual Report. SEBI proceedings naming the company remain ongoing as of the 24 February 2026 announcement.
- Overseas branch audit and fund report. Resolution of the overseas branch audit status and receipt of the overdue Fund Utilization Report, both flagged in the limited-review report for the quarter ended 30 September 2025.
Bottom line: This is a record where reported profits have not converted to cash for five years, and the monitoring agency could not verify where the IPO money went. The auditor’s opinion is clean, but the auditor also flags an unaudited overseas branch, a missing fund report, and a customer-name discrepancy on USD 7.01 million of sales. Watch whether the large foreign receivables actually land, and whether the doubling of RPT limits to ₹120 crore clears a shareholder vote.