NRB Industrial Bearings’ record is clean on audit opinions, six years of unqualified reports, but the CARO annexure tells a different story. Short-term funds were diverted to long-term uses while the company burned cash, a ₹46.47 crore related-party gain masked the operating loss in FY2025, and promoter remuneration has risen to ₹7.94 crore even as losses deepened. The company now depends on promoter support letters to meet its bills.
Key findings
- Short-term funds of ₹18.97 crore were diverted to long-term uses while the company burns cash
Major- The CARO report for FY2026 states that short-term funds aggregating ₹18.97 crore were used for long-term purposes. The company incurred cash losses of 21.36 crore in FY2026, against no cash losses in FY2025, and current liabilities exceeded current assets by ₹18.97 crore. The company has obtained a letter of financial support from a promoter to meet liabilities falling due within one year. - A ₹46.47 crore exceptional gain from a related-party agreement with NRB Bearings Ltd turned FY2025 profitable
Major- In FY2025, the company recognised a net exceptional gain of ₹46.47 crore from an Inter-Company Agreement dated 20 January 2025 with NRB Bearings Limited, a related party, receiving combined consideration of ₹55.12 crore on 14 February 2025. This exceptional gain was the primary driver of the positive FY2025 PAT of ₹18.30 crore. - Promoter remuneration has escalated sharply to ₹7.94 crore while the company remains deeply loss-making
Major- Mr. Devesh Singh Sahney’s managerial remuneration rose from ₹1.01 crore in FY2020-21 to ₹7.94 crore in FY2025-26, while the company reported a net loss of ₹30.11 crore in FY2025-26. The Board proposes a further revision for October 2026 to September 2027 with a cap of ₹20 crore per annum, up from the ₹10 crore cap approved for FY2024-27. The company’s explanatory statement cites government economic measures and failure to achieve targeted sales volume. - The company is structurally dependent on promoter and associate-entity funding, with RPT limits for two loss-making associates doubling to ₹50 crore each
Major- Shareholder approval is sought at the 15th AGM in July 2026 for material RPT limits of ₹50 crore each with associates NRB-IBC Bearings Private Limited and NIBL-Korta Engineering Private Limited for FY2026-27, doubled from the ₹25 crore limits approved at the 14th AGM in July 2025. The company had outstanding loans from associates repayable on demand as at March 31, 2026: ₹3.05 crore payable to NRB-IBC Bearings and ₹2.58 crore payable to NIBL-KORTA Engineering. The company has also given loans to these associates and provided corporate guarantees secured by a second charge on its assets. - Promoter preference shares originally due for redemption in 2026 have been extended by three years
Major- The redemption period of 2% Cumulative, Redeemable, Non-Convertible Preference Shares aggregating ₹20 crore was extended by three years via a special resolution passed on March 26, 2026, pushing the redemption dates of four tranches from March-April 2026 to March-April 2029. As at March 31, 2026, the company’s right-of-use assets and property, plant and equipment serve as second-charge security for loans taken by associate companies. - Deloitte Haskins & Sells completed its maximum five-year term and was replaced by S R B C & CO LLP in FY2024, with 17% of votes cast against the appointment
Minor- Deloitte Haskins & Sells served as statutory auditor for five consecutive years through the 12th AGM on 8 August 2023. The Board approved S R B C & CO LLP for a first term of five years from the 12th AGM to the 17th AGM in 2028. At the 12th AGM, the resolution to appoint S R B C & CO LLP received 17.12% votes against, with 21.89% of promoter votes polled cast against.
What to watch
- Audit-trail remediation. The audit-trail exception for database-layer changes not logged has been reported for three consecutive years through FY2026; the FY2027 annual report will show whether the company has remediated this control deficiency.
- Fund diversion recurrence. The ₹18.97 crore short-term-funds diversion flagged in the FY2026 CARO report will require monitoring in the FY2027 CARO report to see whether the practice continues or is reversed.
- Cross-border set-off. Resolution of the pending RBI/AD bank approval for set-off of export receivables against import payables relating to IBC AG/IBC GmbH transactions dating back to 2013-2015, as disclosed in the FY2025-26 Annual Report.
- Family settlement and re-classification. Completion of regulatory formalities under the Family Settlement Agreement dated 20 January 2025 and the pending re-classification request of the HSZ Family from Promoter Group to Public.
- Preference share redemption. Redemption of the four tranches of 2% Cumulative, Redeemable, Non-Convertible Preference Shares aggregating ₹20 crore now falls due between 28 March 2029 and 4 April 2029.
Bottom line: This is a company whose audit opinions are clean but whose CARO annexure reveals a pattern of short-term funds diverted to plug long-term holes, a business that does not generate cash, and a promoter group that extracts rising remuneration and extends its own redemption dates while the listed entity relies on support letters to stay afloat. The risk is not hidden, it sits in the widening gap between reported profit and cash, the doubling RPT limits with loss-making associates, and the contingent liabilities that remain unprovided. Watch the AGM votes on 22 July 2026 and the FY2027 CARO report for whether the fund-diversion practice stops.