IRM Energy Ltd Forensic Report - SOIC x StockScans Report

as of Sep 2026

IRM Energy's FY2025-26 audit is unqualified, and the company reports a net cash position with a clean statutory auditor rotation on schedule. But the record carries four major related-party concerns: ₹11.61 crore of non-compliant advances flagged for two straight years, an impaired JV loan and overdue preference shares in two associates, a promoter-linked shell being amalgamated into the listed company, and a related-party credit book marked by repeated extensions and rising guarantees.

Key findings

  1. ₹11.61 crore of related-party advances remain outstanding in violation of Companies Act Sections 177/188 Major - The auditor's CARO report for FY2025-26 states that outstanding advances to related parties of ₹11.61 crore as at March 31, 2026 relate to transactions from previous years that were not in compliance with Sections 177 and 188, and that non-compliance continues as balances remain outstanding. The same exception appeared in the FY2024-25 CARO report: advances in the nature of loans made without complying with Sections 177 or 188, lacking adequate documentation to support nature and purpose. In FY2023-24, CARO stated related-party transactions complied with Sections 177 and 188.
  2. Auditor flags ₹5.09 crore impairment on a non-operating JV loan and unredeemed preference shares of ₹3.83 crore plus accrued dividends in two associates Major - IRM Energy recognised an impairment loss of ₹5.09 crore during FY2025-26 on loans, interest and other receivables from joint venture Ni-Hon Cylinders Pvt. Ltd., which has not carried out business operations during the last three years and has negative net worth. The ₹7.49 crore loan was extended on October 19, 2021 with an 18-month tenure at 10.50% p.a., extended until July 31, 2024 before impairment. Preference shares of ₹2.24 crore plus ₹0.47 crore accrued dividend in VPPL and ₹1.59 crore plus ₹0.33 crore in FGPL were due for redemption during FY2025-26 but remained outstanding. The auditor's report on consolidated financial statements contains three Emphasis of Matter paragraphs covering these items.
  3. Promoter-linked shell with nil turnover and ₹11.59 crore of assets is being amalgamated into the listed company Major - On November 12, 2025, the Board approved a draft Scheme of Amalgamation of Enertech Distribution Management Private Limited with IRM Energy Ltd; the Transferor Company holds 21.12% of the equity share capital in the Transferee and has no other significant business/assets. Enertech had total assets of ₹11.59 crore, net worth of ₹11.41 crore, and nil turnover as on October 31, 2025. Upon effectiveness, all debts, liabilities, duties, and obligations of Enertech, including contingent liabilities and promoter/sponsor support undertakings, shall transfer to and vest in IRM Energy Ltd.
  4. Fixed assets charged to lenders rose to ₹907.27 crore by March 31, 2026 Major - The gross book value of fixed assets charged in favour of lenders stood at ₹907.27 crore as on March 31, 2026, up from ₹830.09 crore as on March 31, 2025. The company's Net Debt definition excludes working capital borrowings and lease liabilities. The Board proposed and shareholders approved an increase in borrowing limits under Section 180(1)(c) to ₹1,400 crore at the AGM held August 02, 2024. CRISIL noted a net cash position of approximately ₹258 crore as on March 31, 2025.
  5. Related-party credit book shows repeated extensions, conversions and impairments across three associate/JV entities Major - Advances to Venuka Polymers Pvt. Ltd. were converted into an unsecured inter-corporate loan of ₹10 crore effective January 23, 2026, with balance outstanding of ₹10.17 crore including accrued interest plus ₹0.68 crore against capital advances as on March 31, 2026. The Ni-Hon Cylinders loan of ₹7.49 crore plus accrued interest of ₹2.06 crore became due in FY2024-25 and remained unpaid, with no impairment made that year; however, an impairment loss of ₹5.09 crore was recognized in FY2025-26. Corporate guarantee outstanding against loans availed by associate entities was ₹49.13 crore as on March 31, 2026, up from ₹48.11 crore as on March 31, 2025. License fee from promoter IRM Trust was waived till December 31, 2023, with a full provision of ₹4.29 crore made for the quarter ending March 31, 2024.
  6. Public institutional shareholders repeatedly opposed promoter-linked director appointments Major - Public Institutions voted 80.7427% against the appointment of Mrs. Preetha Reddy as Independent Director and 80.7427% against the appointment of Mr. Dharamchand Harakchand Jain as Independent Director in the postal ballot concluded December 19, 2024. The special resolution for appointment of Mrs. Kaushal Nakrani as Independent Woman Director was not passed at the 9th AGM held August 02, 2024 due to non-receipt of requisite majority. No sitting fees were paid to Dr. Rajiv I. Modi and Mr. Rajiv R. Modi, Non-Executive Directors, during FY2025-26, FY2024-25, and FY2023-24.
  7. Contingent liabilities are dominated by ₹158.12 crore of PNGRB performance bank guarantees and ₹49.13 crore of corporate guarantees for associates Major - Performance Bank Guarantees issued in favour of PNGRB stood at ₹158.12 crore outstanding as on March 31, 2026, unchanged from March 31, 2025. Corporate guarantee outstanding against loans of associate entities stood at ₹49.13 crore as on March 31, 2026, up from ₹48.11 crore as on March 31, 2025. The GST appeal filed before Commissioner (Appeals), Central GST on April 28, 2025 received judgement on January 16, 2026 in favour of the company, with no liability to be paid.
  8. Group structure is in active flux, stakes in two investee companies were diluted through non-participation in rights issues Minor - During the quarter ending March 2024, IRM Energy did not participate in rights issues by Farm Gas Private Limited and Venuka Polymers Private Limited, reducing its holding from 50% to 37.5% in FGPL and from 50% to 33.33% in VPPL, effective 25/01/2024, changing both from Joint Controlled Entities to Associates. During October 2025, IRM Energy subscribed to a rights issue by VPPL, increasing its equity interest from 33.33% to 50.00%, reclassifying the investment from Associate to Joint Venture. SKI-Clean Energy Private Limited, the sole subsidiary, has not yet commenced operations as at March 31, 2026.
  9. Statutory auditor rotation proceeds on schedule after two five-year terms Clean - M/s. Mukesh M. Shah & Co. was appointed at the 6th AGM held September 24, 2021 for a second consecutive five-year term and completes two consecutive terms at the conclusion of the 11th AGM in 2026. M/s. Sorab S. Engineer & Co. is proposed as Statutory Auditors for five consecutive years from the conclusion of the 11th AGM to the conclusion of the 16th AGM in 2031. CARO clause 3(xviii) in the FY2024-25 and FY2023-24 standalone auditor's reports states there was no resignation of statutory auditors during the year.

What to watch

Bottom line: This is an unqualified audit record with a net cash position and a clean auditor rotation. The risk concentrates in the related-party book: non-compliant advances flagged for two years, an impaired JV loan, overdue preference shares in two associates, and a shell company's liabilities being transferred into the listed entity. Watch the September 12 NCLT meeting on the amalgamation and the September 4 AGM votes, and track whether the VPPL loan and preference share redemptions actually get paid.