What’s new

• Received two show‑cause notices from DGGI under CGST Act, one for ₹7,89,97,205 and another for ₹8,39,12,49.
• Company terms demands incorrect and will challenge before adjudicating authorities.
• Board appointed Kanakanjan Nag as additional director and delayed financial results to July 13 due to auditor preoccupation.

Why it matters

For a nano‑cap with a ₹34 cr market cap, a tax demand exceeding 20% of its valuation is material. While contested, it introduces significant litigation risk and operational uncertainty, compounded by delayed financial results.

What we’re watching

• Outcome of adjudication on the show‑cause notice.
• Whether auditor availability is resolved for timely FY26 results.
• Any further disclosure on the nature of the alleged GST violations.

The full read

Innovatus got a show‑cause notice from Bengaluru DGGI. The proposed penalties under the CGST Act total over ₹8 crore — one for ₹7,89,97,205 and another for ₹8,39,12,49. That is roughly a quarter of its ₹34 crore market cap. The company says the demands are wrong and will fight them. But the mere filing of such a large notice introduces real litigation risk. To make matters worse, the board also pushed back approval of overdue financial results to July 13 because the auditor was tied up. For a nano‑cap trading at a P/E of 53 with zero debt, this tax dispute reshapes the risk profile overnight.

Primary source: BSE · NSE