Bajaj Electricals received an adverse appellate order from the West Bengal GST authorities, imposing a total demand of ₹627.36 lakh for FY2020. The order, received on October 12, 2026, relates to alleged excess input tax credit claims and short payments.

The Appellate Authority issued this decision under the CGST/WBGST Act, 2017. This follows an earlier assessment order from August 31, 2024, which had imposed a higher demand of ₹632.52 lakh. The current penalty component stands at ₹31.89 lakh.

Regulatory Context and Financial Impact

The disclosure was made pursuant to Regulation 30 of the SEBI Listing Regulations. The company clarified that the financial impact is limited to the demand raised and the penalty levied. There is no reported impact on operational or other activities of the company due to this specific order.

Management Response

The management is currently evaluating appropriate legal remedies available under law. These options include:

• Filing an appeal before the appropriate appellate tribunal
• Initiating writ proceedings before the Hon'ble High Court against the Appeal Order

What the Numbers Show

The appellate order reduced the total liability by ₹5.16 lakh compared to the initial assessment order of ₹632.52 lakh issued in August 2024. While the penalty component decreased slightly from ₹32.16 lakh to ₹31.89 lakh, the core demand remains largely unchanged, indicating that the primary dispute regarding excess ITC and short payments was not resolved in favor of the company at the appellate stage.

Bajaj Electricals Limited has initiated a postal ballot process seeking shareholder approval for a significant increase in its employee stock option pool and revisions to executive remuneration. The proposals include expanding the Performance Stock Option Plan-2023 (PSOP-2023) pool to 2.60% of paid-up equity share capital and restructuring compensation for the Executive Chairman, MD & CEO, and Executive Director.

The company aims to increase the aggregate number of options under PSOP-2023 from 5,75,510 to 30,02,559. This expansion, representing an additional 24,27,049 options, is intended to support talent retention and attraction over the next three to four years. Concurrently, the board has proposed discontinuing the older ESOP 2015 scheme, making PSOP-2023 the sole operative employee stock option plan.

Executive remuneration revisions

The postal ballot also seeks approval for revised remuneration terms for key leadership figures, effective from various dates in 2026. These changes are partly necessitated by the implementation of new labour codes and aim to align incentives with long-term strategic objectives.

Mr. Shekhar Bajaj requested no increase in his existing remuneration, with changes limited to restructuring components for labour code compliance. Mr. Sanjay Sachdeva’s package includes a fixed salary of ₹5,17,27,500 annually, performance-linked incentives, and a retention bonus payable upon term completion. Mrs. Pooja Anant Bajaj’s revision recognizes her enhanced responsibilities in leading the company’s Corporate Social Responsibility (CSR) and Environmental, Social, and Governance (ESG) agenda.

Financial context and operational recovery

These governance actions occur against a backdrop of financial pressure in FY26. The company reported a standalone Loss Before Tax of ₹75.38 crore for FY26, compared to a profit in the previous year. Total income stood at ₹4,524.34 crore, while total expenses were ₹4,508.57 crore.

Revenue from operations declined 7.6% to ₹4,462 crore in FY26 from ₹4,828 crore in the prior year. The Consumer Products segment saw a 12.2% decline to ₹3,343 crore, driven by channel inventory normalization and weak summer demand. Conversely, the Lighting Solutions segment grew 9.5% to ₹1,120 crore. The loss was significantly impacted by exceptional charges of ₹91 crore, including impairment costs related to the Sambhajnagar facility and moulds, as well as new labour code implementations.

What the numbers show

A notable divergence exists between the top-line contraction and the liquidity position. Despite the 7.6% revenue decline and reported loss, the company generated operating cash flow of ₹619 crore in FY26 and ended the period with cash and cash equivalents of ₹222 crore. This suggests that the reported loss was largely non-cash or driven by one-time exceptional items rather than an operational cash burn, providing financial flexibility for the proposed growth investments and cost rationalization measures.

Voting on these resolutions will be conducted through remote e-voting, commencing on October 6, 2026, and concluding on November 4, 2026.