Narmada Agrobase presents a record where reported profits have not converted to cash for a decade, and the entire unutilised portion of a ₹36.58 crore rights issue meant for an oil mill is being redirected to repay debt. The audit and governance framework is otherwise orderly: promoter holding is stable and unpledged, the group structure is simple, and executive pay is modest.
Key findings
- A decade of profits has produced negative cumulative cash flow, and rights-issue capex is being diverted to debt
Major- Cumulative operating cash flow over the ten years through FY26 is negative ₹21 crore against a cumulative profit of ₹13 crore. In FY26 alone, cash flow was negative ₹1.30 crore while profit was ₹3.86 crore. A rights issue completed on 17 September 2024 raised ₹36.58 crore, of which ₹7.70 crore was allocated for an oil mill plant; as of 29 June 2026, zero percent had been spent on that object, and the Board proposed reallocating the entire ₹7.70 crore to term-loan repayment. - Receivable days nearly doubled to 165 while the doubtful-debt provision barely moved
Major- Receivable days rose from 96 in FY24 to 165 in FY26, and trade receivables reached ₹35.37 crore against revenue of ₹78.39 crore. The allowance for doubtful receivables increased by only ₹0.07 crore to ₹1.18 crore, even as 18 large customers came to represent over 78% of total receivables, up from 7 customers at 48% a year earlier. Management stated in the Q1 FY26 earnings call that the company has "no bad debts". - Statutory auditor re-appointed; internal auditor changed twice in three years
Minor- M/s. Jain Kedia and Sharma have been the statutory auditors since 2021, and shareholders approved their re-appointment for a fresh four-year term on 18 July 2026 with 99.9983% of Public-Non Institution votes in favour and 100.0000% overall when rounded. Internal auditor Rajesh Bhati & Associates resigned on 28 March 2026 citing pre-occupation, and a replacement was appointed the same day. The internal auditor also changed in FY2025-26, and the secretarial auditor changed in FY2023-24. - Promoter holding is stable at 50% with zero pledge, and executive pay is modest
Clean- Promoter shareholding stood at 50.30% with pledge at zero percent. All pledged promoter shares were released between 12 and 29 December 2023, with the reason stated as "Loan Paid". Remuneration to the Managing Director and Whole-time Director was ₹9,00,000 each in FY2023-24, comprising gross salary of ₹9,00,000 and perquisites of ₹0.00. - The group was a single-entity operation until a subsidiary was incorporated just after the FY26 year-end
Clean- From FY2023 through FY2025, the company had no subsidiary, joint venture, or associate. A wholly owned subsidiary, Narmada Bio Feed Private Limited, was incorporated on 6 May 2026, after the FY26 year-end.
What to watch
- Rights-issue debt repayment. Achievement of the ₹7.70 crore loan repayment from reallocated rights-issue proceeds, expected on or before 31 August 2026.
- Receivables provision. The next annual report (period ending 31 March 2027), aging schedule of the 18 large customers and any increase in the ₹1.18 crore doubtful-debt provision against ₹35.37 crore of receivables.
- SEBI warning. The Administrative Warning Letter dated 1 April 2026 does not specify any further action or deadline; monitor for any subsequent SEBI communication or escalation.
- Contingent liabilities. The FY2025-26 annual report discloses contingent liabilities of ₹5.44 lakh for a disputed GST demand, and the next update is expected in the FY2026-27 annual report.
Bottom line: This is a disclosed record with stable promoter governance and a simple structure. The strain sits in the gap between profit and cash: a decade of negative cumulative cash flow, receivables stretching to 165 days with a near-flat provision, and a rights-issue capex plan abandoned entirely in favour of debt repayment. Watch whether the ₹7.70 crore loan repayment completes on schedule and whether the next annual report shows a provision that matches the concentration in those 18 customer balances.