Deep Health raised ₹40 cr to buy a ceramics firm. It bought stocks instead.
The rights issue was 121% of market cap. The promised acquisition of Oasis Ceramics never happened.
What's new
- Deep Health invested ₹39.98 cr from its rights issue in equity of other firms, not the promised acquisition.
- Shareholders only approved the change of objects in January 2026, months after the deviation.
- The audit committee noted the deviation but offered no comment.
Why this matters
A rights issue is a specific promise to shareholders. Deep Health's was for an acquisition that never materialised. The funds were instead used to buy equity in other companies, a move that changes the entire risk profile of the capital raise. For a nano-cap that raised more than its entire market value, the audit committee's silence is the most troubling detail.
What we're watching
- Whether SEBI probes the material change in object clause post-facto.
- Performance and disclosure of the equity portfolio purchased with the funds.
- Any further governance fallout from the audit committee's lack of comment.
The full read
Deep Health AI India raised ₹39.98 crore from public investors in October 2025 to buy Oasis Ceramics. It didn't. Instead, the company invested the money in equity shares of other companies. The raise was 121% of Deep Health's ₹33 crore market capitalisation. It took until January 2026 for shareholders to approve the change of objects. The audit committee noted the deviation and said nothing. The company also overspent on issue expenses by ₹48.86 lakh. A rights issue is a contract. This one was rewritten after the fact, and the auditor is silent.
Questions answered
- What was the rights issue originally for?
- The prospectus stated the ₹39.98 crore would be used to acquire Oasis Ceramics Private Limited. That acquisition did not proceed.
- How large was the raise relative to the company?
- The rights issue was 121% of Deep Health's ₹33 crore market capitalisation, meaning the company raised more cash than it was worth.
- What did the company do with the money?
- Instead of buying Oasis Ceramics, Deep Health invested the entire ₹39.98 crore into equity shares of other companies.
- Who approved this change?
- Shareholders voted in January 2026 to change the objects of the issue. The audit committee noted the deviation but declined to comment.