How much of the IPO money was used incorrectly?

The company disclosed that **₹12.6 crore** was used for working capital beyond the prospectus allocation, and another **₹55.7 lakh** was spent on items not listed in the objects of the issue.

Did the company get approval for these changes?

No. The company explicitly stated that it did not obtain shareholder approval for these material deviations.

What is the status of the remaining IPO funds?

As of March 31, 2026, **₹3.9 crore** of IPO funds remained unutilized, with **₹1.0 crore** of that amount currently outstanding and pending recovery.

What did the auditors say about these findings?

The statutory auditors issued an unmodified opinion but included an emphasis of matter paragraph to highlight these specific deviations.

Earnings · Dyes & Pigments · Micro cap

Shlokka Dyes admits to unauthorized use of IPO funds in FY26 results

The company diverted ₹12.6 crore into working capital without shareholder approval, while revenue and profit both halved.

— 1 earlier story on Shlokka Dyes Ltd. →

SHLOKKA 27 May 2026 · 5:19 PM IST Verify on BSE · NSE

Mkt cap₹53.71 cr

P/E5.37×

ROE36.73%

Debt / eq.1.02

₹12.6 cr Amount diverted to working capital in excess of prospectus limits.

What's new

Revenue fell to ₹81.9 cr from ₹103.4 cr in FY25.
Net profit dropped to ₹5.0 cr from ₹10.0 cr.
Company admits to unauthorized spending of ₹12.6 cr on working capital and ₹55.7 lakh on unlisted objects.

Why this matters

Shlokka Dyes has confirmed long-standing governance concerns regarding its IPO proceeds. Diverting funds without shareholder approval is a breach of trust that auditors have now formally flagged in an emphasis of matter paragraph.

What we're watching

Whether shareholders demand a formal explanation or vote on the deviations.
The recovery status of the ₹1.0 cr in outstanding funds.
Potential regulatory action following the auditor's emphasis of matter.

The full read

Shlokka Dyes ended FY26 with a sharp contraction in its financials, as revenue fell to ₹81.9 crore from ₹103.4 crore and net profit halved to ₹5.0 crore. While the performance decline is stark, the primary issue lies in Note 10 of the financial statements. The company formally admitted to diverting ₹12.6 crore into working capital beyond its prospectus limits and spending another ₹55.7 lakh on unauthorized civil works and purchases. These deviations occurred without shareholder approval. With a market capitalization of only ₹51 crore, the scale of these unauthorized expenditures is material. Although these issues were previously flagged by a monitoring agency, this filing represents the company's own quantified admission of non-compliance. The auditors have now added an emphasis of matter paragraph to the results, signaling that these governance failures are no longer just external allegations but verified internal facts.

Questions answered

How much of the IPO money was used incorrectly?: The company disclosed that ₹12.6 crore was used for working capital beyond the prospectus allocation, and another ₹55.7 lakh was spent on items not listed in the objects of the issue.
Did the company get approval for these changes?: No. The company explicitly stated that it did not obtain shareholder approval for these material deviations.
What is the status of the remaining IPO funds?: As of March 31, 2026, ₹3.9 crore of IPO funds remained unutilized, with ₹1.0 crore of that amount currently outstanding and pending recovery.
What did the auditors say about these findings?: The statutory auditors issued an unmodified opinion but included an emphasis of matter paragraph to highlight these specific deviations.

Mentioned: Shlokka Dyes Ltd. · FY2026 · Note 10

Primary source BSE · NSE

An independent reading of the company's own disclosure — the primary filing above is the final word.

Story so far

All notes on SHLOKKA →

27 May 2026 · 5:19 PM IST Shlokka Dyes admits to unauthorized use of IPO funds in FY26 results
today Shlokka Dyes reports lower annual profit and revenue