Siyaram Silk Mills’ record is clean on its face: seven years of unqualified audit opinions, zero promoter pledge, and a decade of cumulative operating cash flow of ₹1,520 crore. Three things deserve attention. A pending NCLT scheme will capitalise reserves into preference shares carrying a fixed 9% coupon and mandatory redemption, routing accumulated profits around the P&L. Reported profit leans on recurring Level-3 fair-value gains on investment properties and investments, where valuation rests on management’s own inputs. And operating cash flow has covered only 61% of cumulative EBITDA over ten years, even as the company returns capital aggressively through dividends and a ₹108.92 crore buyback.
Key findings
- A pending NCLT scheme will issue preference shares with a fixed 9% coupon by way of bonus
Major- The Board approved a Scheme of Arrangement on 26 October 2024 to issue 9% Cumulative Non-Convertible Redeemable Preference Shares by way of bonus, redeemable at the end of 3 and 5 years. The final NCLT hearing was held on 16 April 2026 with the order awaited as of the FY2025-26 report date. Separately, other income for FY2025-26 includes a fair valuation gain of ₹12.73 crore on investments, and investment properties are measured at fair value using the replacement cost method, categorised as Level 3 in the fair value hierarchy. - Operating cash flow consistently lags reported profit, while the company returns capital aggressively
Minor- Cumulative CFO of ₹1,520 crore covered only 61% of cumulative EBITDA of ₹2,488 crore over the ten years to FY26. In FY26, CFO was ₹93.18 crore against PAT of ₹231 crore, a CFO/PAT ratio of 0.40x. The company bought back 14,99,992 equity shares in FY2023-24 for ₹108.92 crore, and the Board recommended a total dividend of ₹16 per share for FY2025-26. - Revenue recognition is a standing Key Audit Matter, while receivables are lengthening and write-offs more than doubled
Minor- The auditor has designated revenue recognition a Key Audit Matter in every annual report from FY2019-20 through FY2025-26, citing risks of incorrect cut-off and misstatement of discounts and rebates. Trade receivables days increased from 69.84 in FY23 to 91.78 in FY26. Bad debts and irrecoverable balances written off rose from ₹78.16 lakh in FY24 to 3.67 crore in FY26. - Disputed tax demands have grown and diversified across multiple forums
Minor- Disputed statutory dues as at 31 March 2026 total ₹120.24 lakhs, comprising Property Tax ₹83.35 lakhs, Income Tax ₹14.20 lakhs, and GST ₹22.69 lakhs. Income Tax demands aggregating ₹10.51 crore for A.Y. 2012-13 to A.Y. 2015-16 were under appeal as at 31 March 2020 and remained under appeal as at 31 March 2022, with no provision made; by 31 March 2022 additional demands of ₹1.62 crore, ₹79.02 lakhs, and ₹85.50 lakhs had been added. Equity shareholders approved the Scheme of Arrangement on 29 December 2025 with 99.98% of votes cast in favour. - Promoter family dominates the board and executive roles, with remuneration repeatedly approved despite public-institutional dissent
Minor- Promoter shareholding stood at 67.44% as of the latest FY, with zero pledge throughout. The board comprises 10 directors, 5 of whom are Executive/Non-Independent from the promoter family or long-serving executives. At the 2021 AGM, the special resolution to re-appoint Pawan D. Poddar as Joint Managing Director received 13.05% votes against overall, with public institutions voting 82.47% against. - Promoter shareholding reshuffles intensify as two promoters slash direct holdings
Minor- During FY2025-26, promoter Abhishek S. Poddar sold 585,000 shares via open market, reducing his holding to 77 shares, while promoter entity DPP Enterprises LLP acquired the same quantities on the same dates. On 8 June 2026, promoter Shrikishan D. Poddar transferred 1,028,500 shares via off-market gift to four other promoters, reducing his holding to 93 shares. - Audit opinions have been unqualified across all years, with a recurring database-level audit-trail gap in FY26
Minor- The standalone and consolidated audit opinions were unqualified in every year from FY2020 through FY2026. In FY26, the accounting software’s audit-trail feature was available at the database level for only 201 days during the year; no instance of tampering was found. Undisputed property tax of ₹22.14 lakhs was outstanding for more than six months as at 31 March 2026, down from ₹69.24 lakhs as at 31 March 2025.
What to watch
- Income Tax appeals. Demands of ₹10.51 crore for A.Y. 2012-13 to A.Y. 2015-16 were under appeal as at 31 March 2022.
- GST appeals. Demands of ₹22.69 lakhs for FY 2018-19 are pending before the Joint/Additional Commissioner (Appeals) as at 31 March 2026.
Bottom line: This is a disclosed and audited record with a seven-year unqualified streak and zero promoter pledge. The risk sits in two places: the pending NCLT scheme, which will convert accumulated reserves into fixed-coupon preference shares and lock in a future cash outflow, and the persistent gap between reported profit and operating cash flow, which the company bridges with short-term debt while returning capital to shareholders. Watch the NCLT order and the income-tax appeals.