Linde India’s record is defined by a single unresolved dispute: for three years the auditor has qualified its opinion because the company applies a per‑contract materiality test to related‑party transactions that SEBI, SAT and the Supreme Court have all declined to stay. The company’s 75% promoter controls the board, public shareholders have twice voted down the Praxair India RPT limits, and yet those transactions continue, purchases alone ran at 34% of the total in FY26. Beneath that stand‑off the operating business is sound: cash profit covers reported profit every year, and the auditor rotation was orderly.
Key findings
- Public shareholders have twice rejected RPT limits with Praxair India, yet the company kept transacting without approval
Major- At the 85th AGM on 24 June 2021 shareholders voted 93.95% against a ₹950‑crore aggregate RPT limit with Praxair India and Linde South Asia Services. At an EGM on 5 March 2026 they again rejected a ₹417.7‑crore resolution for FY26, with 89.24% of votes cast against. Despite those defeats, related‑party purchases were 33.96% of total purchases, sales 13.20%, and investments 96.34% in FY26, as disclosed in the company’s independently assured BRSR. - SEBI’s investigation has escalated through SAT and the Supreme Court without a stay, while summons continue
Major- SEBI’s final order of 24 July 2024 held that the per‑contract materiality test violates LODR and directed NSE to appoint a valuer for the Praxair JV. SAT dismissed the company’s appeal on 5 December 2025; the Supreme Court admitted a further appeal on 16 January 2026 but granted no stay. SEBI issued fresh summons on 9 April 2026 and 28 April 2026, to which the company responded on 19 May 2026. - A court‑ordered valuation of business foregone under the Praxair JV creates an unquantified contingent exposure
Major- The NSE‑appointed valuer’s report dated 16 March 2026 was received on 24 March 2026; the company filed an interlocutory application in the Supreme Court on 1 April 2026 seeking to block any steps on it, and the matter had not been heard as of the FY26 report date. The auditor states the impact on the financial statements is “presently not determinable”. Disclosed contingent liabilities from tax and other claims stood at ₹75.10 crore as of 31 March 2026, unchanged from the prior year. - The 75% promoter controls the board while public institutions repeatedly vote against promoter‑nominated directors
Major- Linde Plc held 75.00% as of 31 March 2026. At the 89th AGM on 14 August 2025 public institutions voted 59.65% against the re‑appointment of the Managing Director and 58.15% against the re‑appointment of a director. The MD resigned on 31 December 2025 and the CFO resigned on 15 February 2026; both roles were filled by new appointees in January and February 2026. - Heavy capex has pushed CWIP to ₹1,343 crore and produced negative free cash flow in two of the last three years
Minor- Free cash flow was negative ₹739 crore in FY25 and negative ₹127 crore in FY24, turning positive only in FY26 at ₹280 crore, as capex outflows exceeded operating cash generation. CWIP stood at ₹1,343 crore as of FY26, up from ₹159 crore disclosed in the standalone notes, with the balance-sheet figure reflecting consolidated CWIP that has risen sharply from prior years. The Board nevertheless recommended a dividend of ₹12 per share (₹102.34 crore total cash outgo) for each of FY24, FY25 and FY26, comprising a normal dividend of ₹4-4.50 and a special dividend of ₹7.50-8.00. - Goodwill of ₹8.93 crore from the 2021 HPS Gases acquisition has never been impaired
Minor- The carrying amount of goodwill stood at ₹8.93 crore as of 31 March 2026 and 31 March 2025, arising from the acquisition of business assets from HPS Gases Ltd in calendar 2021. Annual impairment tests using the DCF method have recognised no impairment loss in FY26, FY25 or any prior year since recognition. - Auditor fees fluctuated after the rotation from Deloitte to PwC
Clean- Deloitte Haskins & Sells retired at the 86th AGM in 2022 and was replaced by Price Waterhouse & Co for a five-year term through the 91st AGM in 2027. Total fees paid to the statutory auditor and its network firms were ₹0.94 crore in FY20 and FY21, ₹0.91 crore in the 15-month period ended 31 March 2023, ₹0.7 crore in FY25, and ₹1.01 crore in FY26. No regulatory actions against any auditor are disclosed in any filing from FY19 through FY26.
What to watch
- Supreme Court final hearing. The appeal against the SAT order dated 5 December 2025 was admitted on 16 January 2026 with no stay.
- Valuation report stay. The company’s interlocutory application filed on 1 April 2026 seeking a stay on the NSE‑appointed valuer’s report dated 16 March 2026 had not been heard as of the FY26 annual report.
- SEBI investigation outcome. Penal consequences from the 24 July 2024 SEBI order remain not ascertainable as of the FY26 annual report; summons dated 9 April 2026 and 28 April 2026 are outstanding.
- Whistle‑blower investigation. One complaint was under investigation as of the FY26 audit report dated 30 May 2026.
Bottom line: This is a profitable industrial gas business with consistent cash conversion, a clean group structure, and an orderly auditor rotation. The entire audit qualification, the regulatory escalation, and the shareholder rejections trace back to a single governance choice: the company’s refusal to aggregate related‑party transactions with Praxair India as SEBI requires. That choice has now survived three years of qualified opinions, two adverse shareholder votes, and a sequence of appeals that have reached the Supreme Court without a stay. The unquantified exposure from the court‑ordered JV valuation sits on top of that dispute. Watch the Supreme Court hearings, both on the aggregation principle and on the valuer’s report, because their outcome will determine whether the qualification lifts and what contingent liability crystallises.