Deep Health AI raised more than its market cap. Then it spent the cash on stocks.
A rights issue 121% of market cap was meant to buy Oasis Ceramics. The company put the money in other companies' equity shares instead. The audit committee said nothing.
What's new
- Deep Health AI invested its ₹39.98 cr rights-issue proceeds in equity shares of other companies, not the promised Oasis Ceramics acquisition.
- The rights issue was 121% of the company's ₹33 cr market cap; shareholders approved the change in January 2026.
- The audit committee noted the deviation but offered no comment.
Why this matters
Raising more cash than a company is worth is unusual. Spending it on something other than the stated reason, with the board's oversight body silent, is a governance failure. For a nano-cap, this level of undisclosed deviation erodes the basic contract between company and shareholder.
What we're watching
- Whether SEBI investigates the unexplained deviation in use of proceeds.
- What the company's equity investments in other firms are worth now.
- Any further board or promoter turnover following the governance lapse.
The full read
Deep Health AI India raised ₹39.98 crore from shareholders in a rights issue last October. The money was for one thing: buying Oasis Ceramics. Instead, the company put the cash into other companies' equity shares. That switch was approved in January. The amount raised was 121% of the company's entire market capitalisation of ₹33 crore, meaning it collected more cash from its owners than the business itself was worth. The audit committee flagged the deviation but had nothing to say about it. There was also a minor over-spend of ₹48.86 lakh on issue costs. For a company this size, a rights issue this large is already a red flag. Spending it on something other than the stated purpose, with the board's oversight body silent, is a governance failure.
Questions answered
- What was the rights issue for, and what did the company do instead?
- The ₹39.98 crore rights issue, completed in October 2025, was for acquiring Oasis Ceramics. Instead, Deep Health AI invested the cash in equity shares of other companies.
- Why is the size of the rights issue unusual?
- The ₹39.98 crore raised was 121% of the company's ₹33 crore market capitalisation. The company collected more cash from its owners than the business itself was worth.
- What was the audit committee's response to the deviation?
- The audit committee noted the deviation in the use of funds but offered no comments on it, leaving the capital-allocation switch unexplained at the board level.
- Was there any other spending issue mentioned?
- The company also overspent ₹48.86 lakh on issue expenses beyond the original allocation.