Gaja Alternative Asset Management's financial statements carry clean audit opinions, but the cash story underneath is weak: revenue more than doubled in two years while receivables stretched to 354 days, and cumulative operating cash flow was negative ₹32 crore against ₹240 crore of reported profit. The company also restated prior-year reserves, reclassified carried interest into revenue, and parked ₹11.7 crore of IPO expenses on the balance sheet. Promoters face criminal proceedings and a SEBI rejection, and borrowings jumped tenfold in six months.
Key findings
- Reported profit is not backed by operating cash flow, cumulative CFO is negative ₹32cr against ₹240cr PAT
Major- Cumulative CFO over FY22-FY26 was ₹-32 crore against cumulative PAT of ₹240 crore; excluding other income of ₹143 crore, the ratio is -0.33x. CFO was negative in four of the last five years, and free cash flow was negative for two straight years at ₹-9.19 crore in FY25 and ₹-20.73 crore in FY26. The company paid dividends of ₹6 crore in FY26 while free cash flow was negative, and capitalised expenses to leasehold improvements under development, with CWIP at ₹4.33 crore against PP&E of ₹1.76 crore. - Accounting-policy changes and restatements materially reshape reported profit and equity
Major- Carried interest of ₹18.39 crore was reclassified from Other Income to Revenue from Operations for FY24 due to prior-period classification errors. Retained earnings were restated with a 56.19 crore prior-period error for Fiscal 2023, and the Foreign Currency Translation Reserve with a 13.89 crore adjustment. IPO expenses of ₹11.7 crore were parked under "Other Current Assets" to be adjusted against securities premium only on successful listing, and a 2500:1 bonus issue approved in June 2025 reduced retained earnings by 41.98 crore. - Audit opinions are clean, but the audit-trail exception recurred for three straight years until August 2025
Major- Nangia & Co LLP issued an unqualified opinion for FY26, with an Emphasis of Matter on the ₹11.7 crore capitalised IPO expenses. The accounting software's audit trail feature was not enabled from April 1, 2025 to August 27, 2025, the sole exception to proper books under Section 143(3)(b); the same modification appeared in the FY2025 and FY2024 reports, with the company stating the feature was enabled on August 28, 2025. The consolidated opinion carried an Other Matter that the Mauritius subsidiary was audited by another auditor under foreign GAAP and converted by management to Indian GAAP. - Related-party transactions dominate revenue and include advances to directors and a subsidiary guarantee for the parent's loan
Major- Related-party transactions were 104.34% of total income for the six months ended September 30, 2025, 113.74% for Fiscal 2025, and 106.00% for Fiscal 2024. Advances to directors included 4.49 crore to a subsidiary director in FY2024 and 0.24 crore to a promoter in FY2025. Subsidiary Gaja Corporate Advisors Pvt Ltd gave a corporate guarantee to 360 One Wealth Prime Ltd for a loan availed by the holding company during FY 2025-26. - Promoters face criminal proceedings and regulatory scrutiny, and SEBI rejected an exemption application
Major- Promoters Mr. Gopal Jain and Mr. Imran Jafar are involved in criminal proceedings related to a FIR filed by Educomp Learning Private Limited regarding investments in EuroKids International Private Limited. Mr. Gopal Jain's name appears in the RBI list of "defaults above Rs. 1 crore under Non-Suit Filed Accounts". SEBI rejected the company's exemption application to exclude Mr. Johrilal Jain and his entities from promoter-group disclosure by letter dated September 23, 2025. - Borrowings jumped tenfold in six months to ₹40.88 crore, secured on fund units, deposits, and a subsidiary guarantee
Major- Total borrowings rose from 4 crore as of March 31, 2025 to 40.88 crore as of September 30, 2025. The borrowings comprised a 33.33 crore bank overdraft from ICICI Bank, a 6.58 crore LAS facility from 360 One Prime Limited, and vehicle loans. The term loan is secured against units of Gaja Capital India AIF fund, bank deposits are lien against the overdraft, and a subsidiary guaranteed the parent's loan. - A Mauritius tax demand is the only new contingent liability; the largest litigation item is a ₹195 crore arbitral award the group is trying to enforce
Minor- Gaja Advisors Ltd (Mauritius) received a Mauritius Revenue Authorities assessment order dated September 29, 2025 raising a demand of USD 153,653 (₹1.45 crore), which it appealed with 10% deposited under protest. The group obtained a Singapore International Arbitration Centre award dated January 7, 2021 against SEPC Limited directing damages of ₹100.12 crore, ₹69 crore, and ₹25.84 crore to three group entities, with interest at 7.25% p.a.. The Madras High Court recognised the award as enforceable on January 5, 2023, and execution proceedings remain pending. - Auditor change is a routine rotation triggered by the IPO-driven share capital increase
Clean- Nangia & Co. LLP resigned as statutory auditor effective from the conclusion of the 27th AGM on September 26, 2026, citing paid-up share capital exceeding the Section 139(2) rotation threshold, and stated no concerns or material reason other than rotation. The Board and Audit Committee recommended Price Waterhouse Chartered Accountants LLP as statutory auditors for five years at meetings held September 3, 2026. The resignation format states "None" for concerns, efforts made, and any other facts relevant to the resignation.
What to watch
- IPO completion and ₹11.7 crore expense adjustment. The capitalised IPO expenses will be adjusted against securities premium only on successful listing, pending SEBI approval of the UDRHP filed as of the FY2025-26 Annual Report.
- New auditor assumes office. Price Waterhouse Chartered Accountants LLP formally takes over at the conclusion of the 27th AGM on September 26, 2026.
- Arbitral award enforcement. Execution proceedings before the Madras High Court against SEPC Limited and Twarit Consultancy Private Limited were pending as of the FY2025-26 reporting period.
- Mauritius tax appeal. Outcome of the appeal against the September 29, 2025 assessment order is pending as of the FY2025-26 reporting period.
- Receivables collection. Whether any credit-loss allowance is recognised against the ₹131 crore trade receivables balance reported as at March 31, 2026.
Bottom line: This is an audited record with clean opinions, but the cash conversion is the weak point, receivables at 354 days and negative operating cash flow against growing reported profit. The accounting choices around carried interest reclassification, prior-period restatements, and capitalised IPO expenses deserve attention, as do the promoter-level legal and regulatory matters. Watch whether the IPO completes, whether the audit-trail feature holds for a full year, and whether the receivables balance starts converting to cash.