Shivam Autotech's Fund Utilization Report Raises Concerns

Rs 112.01 Crore of Rs 120 Crore OCD Funds Utilized; Rs 81.33 Crore Net Loss Reported for FY26.

Reader Takeaway: Underutilization of OCD funds and continuous losses pose repayment risks amid low share price.

What just happened

Shivam Autotech Ltd has released its Monitoring Agency Report from CARE Ratings for the quarter ended June 30, 2026. The report details the utilization of Rs 120 crore raised through an optionally convertible debenture (OCD) preferential issue.

As of June 30, 2026, the company had utilized Rs 112.01 crore, leaving Rs 7.99 crore unutilized. Of the Rs 115 crore allocated for NCD repayment, Rs 112.00 crore was used. For long-term working capital, only Rs 0.01 crore of the Rs 5.00 crore was utilized.

Why this matters

The significant underutilization of funds for working capital, coupled with continuous net losses since FY17, raises concerns about Shivam Autotech's financial health and its ability to meet the repayment obligations of the OCDs. The current market price of the company's stock is substantially below the OCD conversion price, amplifying these risks.

The backstory

Shivam Autotech has been facing financial challenges, reporting net losses for several years. In FY26, the net loss widened to Rs 81.33 crore from Rs 48.04 crore in the previous year. High finance costs, including redemption premiums on OCDs, have contributed to these losses.

What changes now

CARE Ratings' report highlights potential repayment risks if the OCDs are not converted into equity. The company's management, however, expressed confidence in meeting financial covenants and believes the conversion mechanism is tied to company performance.

Risks to watch

Key risks include the company's inability to repay the OCDs if conversion does not occur, given the stock price is below the conversion price (Rs 16.41 vs Rs 28.81). The substantial unutilized amount for working capital also signals potential operational strain.

Peer comparison

Information on peer company fund utilization and financial performance for similar preferential issues is not provided in the filing.

Context metrics (time-bound)

• Total OCD Funds: Rs 120 crore
• Total Utilized: Rs 112.01 crore (as of June 30, 2026)
• Total Unutilized: Rs 7.99 crore (as of June 30, 2026)
• NCD Repayment Utilized: Rs 112.00 crore (out of Rs 115 crore)
• Working Capital Utilized: Rs 0.01 crore (out of Rs 5.00 crore)
• Net Loss FY26: Rs 81.33 crore
• Net Loss FY25: Rs 48.04 crore
• OCD Conversion Price: Rs 28.81 per share
• Stock Price (July 22, 2026): Rs 16.41 per share

What to track next

Investors should closely monitor Shivam Autotech's subsequent financial results, any further utilization of the OCD funds, and developments regarding the OCD conversion or repayment. The company's ability to improve its financial performance and narrow its losses will be crucial.