Advik Capital Limited has reported a consolidated net loss of Rs 22.07 crore for FY 2025-26, a sharp downturn from the previous year's profit. The company's financials face significant scrutiny, with independent auditors issuing a qualified opinion over the recoverability of Rs 92.40 crore in loans and the conduct of related party transactions without mandatory shareholder approval. Amid these challenges, the firm is pursuing a Rs 100 crore Rights Issue to bolster its capital base and continues legal recovery efforts against Elitecon International Limited.
Advik Capital Reports Significant FY26 Losses and Auditor Qualifications
Advik Capital reported a consolidated net loss of Rs 22.07 crore for FY 2025-26, compared to a profit of Rs 8.23 crore in the prior fiscal year. Total income plummeted to Rs 2.92 crore from Rs 29.30 crore in the previous year.
Reader Takeaway: Investors face risk from auditor-flagged loan recoverability issues and regulatory hurdles concerning unapproved related party transactions.
What just happened
Advik Capital has released its financial results for the fiscal year ended March 31, 2026, revealing a move from profit to a substantial net loss. The company's independent auditors issued a qualified opinion, citing a lack of documentation for loans worth Rs 92.40 crore and related interest of Rs 10.98 crore. Additionally, auditors noted that material related party transactions were executed without the mandatory prior shareholder approvals required under SEBI regulations and the Companies Act.
Why this matters
The auditor’s qualifications raise questions regarding the quality of the company's loan book and its internal governance processes. With some borrowers identified as having negative net worth and missing TDS documentation, the adequacy of credit loss provisions remains uncertain. The company is now attempting to seek retroactive ratification from shareholders for the unapproved transactions.
The backstory
The company is currently entangled in recovery proceedings against Elitecon International Limited, involving a claim of Rs 64 crore in financial assistance. Including interest, the total outstanding exposure to this entity reached Rs 73.96 crore as of March 31, 2026. Furthermore, the company reported an Enforcement Directorate visit in April 2025, which concluded without adverse findings.
What changes now
Advik Capital received in-principle approval from the BSE on May 08, 2026, for a proposed Rights Issue of up to Rs 100 crore. Management intends to use these funds to strengthen long-term financial resources. The company has also appointed M/s MASAR & Co. as new statutory auditors following the resignation of the previous auditor.
Risks to watch
The primary risks include the potential write-offs of the contested Rs 92.40 crore loan portfolio and the legal uncertainty surrounding the recovery of funds from Elitecon International. Shareholder approval of the previously unapproved related party transactions is another critical governance milestone to monitor.