Arcotech Limited’s board of directors approved the issuance of unrated, unlisted, senior, secured, redeemable non-convertible debentures (NCDs) on a private placement basis. The company plans to raise up to ₹115 crore through this instrument.

The board meeting held on September 7, 2026, also sanctioned a significant increase in authorized equity share capital and the reclassification of existing preference shares. These proposals require shareholder approval at the upcoming annual general meeting.

Capital Raise Details

The company intends to issue 1,150 NCDs with a face value of ₹10 lakh each. The total size of the issue is capped at ₹115 crore. Key terms include:

• Tenure: 4 years from the date of allotment
• Security: Secured by charges over assets as mutually agreed
• Listing: Unlisted
• Rating: Unrated
• Interest: Coupon rates and payment schedules to be determined by the board

The debentures will be issued in one or more tranches to eligible investors. All benefits, including interest, will accrue from the deemed date of allotment.

Authorized Capital Increase

The board approved increasing the authorized equity share capital from ₹21 crore (comprising 10.5 crore equity shares of face value ₹2 each) to ₹136 crore. This expansion involves creating an additional 57.5 crore equity shares of face value ₹2 each.

This move aims to facilitate further capital raising and corporate actions. The alteration requires amending Clause V of the Memorandum of Association.

Preference Share Reclassification

The company approved reclassifying its authorized non-convertible, non-cumulative redeemable preference share capital of ₹35 crore (35 lakh shares of face value ₹100 each) into general preference shares. This change provides flexibility regarding the terms and conditions governing these instruments for future actions.

Other Approvals

The board fixed the date for the 45th Annual General Meeting (AGM) as September 29, 2026. The meeting will be conducted through video conferencing or other audio-visual means. Additionally, the board recommended the appointment of M/s. Agarwal U R S & Co. as statutory auditors for a five-year term, subject to shareholder approval.

Arcotech Limited reported a narrowed standalone loss of ₹8.16 crore for the quarter ended June 30, 2026 (Q1FY27), compared to a loss of ₹8.24 crore in the corresponding period of the previous fiscal year. The company generated no revenue from operations during the quarter, with total income restricted to nil, while total expenses remained relatively stable at ₹8.16 crore against ₹8.24 crore in Q1FY26. This marginal improvement in the loss position reflects consistent cost management despite the absence of operational revenue streams.

The Board of Directors, meeting on July 29, 2026, approved the unaudited financial results prepared in accordance with IND-AS. The results were reviewed by the Audit Committee and subjected to a limited review by the statutory auditors, Amit Joshi & Associates, in compliance with Regulation 30 and Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Radhanath Pattanayak, Whole Time Director, signed off on the disclosure.

Financial Performance Highlights

The company’s expense structure was dominated by finance costs and depreciation, indicating ongoing debt servicing obligations and asset amortization without offsetting operational inflows. Other expenses saw a significant reduction, contributing to the slight narrowing of the overall loss.

What the Numbers Show

The primary driver of Arcotech’s financial position remains its high fixed cost base relative to zero operational revenue. Finance costs accounted for approximately 69% of total expenses in Q1FY27, highlighting the burden of debt servicing in the absence of cash flow from operations. While depreciation decreased by ₹11.88 lakh year-on-year, this saving was partially offset by a rise in other expenses. The lack of revenue suggests that the company is likely in a restructuring or pre-operational phase, relying on capital reserves or external support to meet its obligations. Notably, the company disclosed that it has reached a settlement with all secured lenders part of the consortium/Joint Lenders’ Forum (JLF) as of July 1, 2026, which may provide some stability to its debt profile moving forward.