Shlokka Dyes spent ₹12.6 cr of IPO money on things the prospectus didn't approve.
The company's own accounts now quantify the excess working-capital use and unauthorised expenses. Revenue fell 21% to ₹81.9 crore.
— 1 earlier story on Shlokka Dyes Ltd. →What's new
- FY26 results disclose ₹12.6 cr in excess working-capital use from IPO proceeds.
- Another ₹55.7 lakh went to purchases and civil works not listed as issue objects.
- Revenue fell 21% to ₹81.9 cr; net profit fell to ₹5.0 cr from ₹10.0 cr.
Why this matters
The filing puts a precise, audited price on the misallocation. For a nano-cap with a ₹51 crore market capitalisation, ₹12.6 crore in unapproved excess use is a quarter of its equity value. The auditor's 'emphasis of matter' paragraph means the books are clean on operations but flagged on fund governance.
What we're watching
- Whether SEBI or the stock exchanges initiate any action on the unapproved deviations.
- How the ₹1.0 crore outstanding recovery is pursued.
- If the IPO monitoring agency's earlier concerns lead to further regulatory steps.
The full read
Shlokka Dyes' annual results are supposed to be about the numbers. They are, but the more important number is buried in Note 10. The company spent ₹12.6 crore more on working capital than its IPO prospectus allowed and another ₹55.7 lakh on purchases and civil works the issue didn't mention. Neither deviation was approved by shareholders. The auditor signed off on the accounts but added an emphasis-of-matter paragraph to flag the issue. Meanwhile, the business itself is shrinking. Revenue fell 21% to ₹81.9 crore and net profit dropped to ₹5.0 crore from ₹10.0 crore. With ₹3.9 crore in unutilised IPO cash still on the books and ₹1.0 crore of that pending recovery, the questions about fund governance are not yet closed. For a company with a ₹51 crore market capitalisation, the scale of the deviation is hard to ignore.
Questions answered
- What exactly did Shlokka Dyes do with the IPO money that it shouldn't have?
- It used ₹12.6 crore for working capital in excess of the amount specified in the prospectus and spent ₹55.7 lakh on purchases and civil works that were not listed as objects of the issue. Neither was approved by shareholders.
- Is there any IPO cash left?
- As of March 31, 2026, ₹3.9 crore in IPO funds remained unutilised. Of that, ₹1.0 crore is outstanding and pending recovery.
- What did the auditors say about this?
- The statutory auditors gave an unmodified opinion on the financial statements but included an 'emphasis of matter' paragraph specifically referencing the fund-utilisation deviations.
- How big is this problem relative to the company?
- Shlokka Dyes has a market capitalisation of just ₹51 crore. The ₹12.6 crore in excess working-capital use represents roughly a quarter of that value.
Shlokka Dyes Ltd.
Latest quarter · Mar 2026
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Story so far
All notes on SHLOKKA →- 27 May 2026 · 5:19 PM IST Shlokka Dyes spent ₹12.6 cr of IPO money on things the prospectus didn't approve.
- 40d ago Shlokka Dyes repeats known IPO fund breaches in annual results