Desi Farms India Limited has acquired a 73.66% stake in SNA Milk and Milk Products Limited and a 62.67% stake in DFSU Farmer Connect Private Limited through a share swap mechanism. The Board of Directors approved the issuance of 36,56,494 5% Compulsorily Convertible Debentures (CCDs) on a preferential basis to the shareholders of the target entities. The total cost of acquisition is approximately ₹49.36 crore, executed at arm's length based on a valuation report from a registered valuer.

The transactions fall under related party transactions as Sunil Kumar Shahi, the Managing Director and Promoter, holds directorship and shares in the target entities. The company has received the requisite approvals, including in-principle approval from BSE Limited for the preferential issue and approval from the members of the company. The acquisitions are part of a strategic expansion plan to diversify into the milk and milk products sector, aiming to generate operational synergies and improve consolidated revenues without adversely affecting existing logistics operations.

Acquisition Details

The acquisition involves the purchase of equity shares and Compulsorily Convertible Preference Shares (CCPS) in SNA and equity shares in DFSU. The company acquired 83,427 equity shares and CCPS representing 73.66% of SNA's paid-up capital on a fully diluted basis. For DFSU, the company acquired 1,14,66,484 equity shares representing 62.67% of the paid-up capital. The company is currently in the process of acquiring 100% of both entities pursuant to the BSE in-principle approval dated June 24, 2026.

Target Entity Profiles

SNA Milk and Milk Products Limited, incorporated on May 27, 2016, is engaged in the manufacturing, processing, and distribution of milk and milk-based products, including liquid milk, dairy derivatives, and ice cream. The entity operates across Mumbai, Pune, Bangalore, Ahmedabad, Hyderabad, and other tier-1 cities. For the financial year 2024-25, SNA recorded a turnover of ₹33,74,44,514.

DFSU Farmer Connect Private Limited, incorporated on August 27, 2025, is involved in the business of manufacturing, processing, trading, marketing, and distribution of ice creams, healthy snacks, and other food products. The entity undertakes end-to-end activities ranging from product development to distribution through multiple channels catering to domestic markets.

The consideration for the acquisition was settled via a share swap arrangement involving the issuance of CCDs. The allotment of CCDs was completed on July 4, 2026, for a portion of the SNA stake, with the overall transaction structure designed to facilitate the company's entry into the stable, consumption-driven dairy sector.

Desi Farms India Limited reported a narrowed net loss of ₹0.24 lakh for the financial year ended March 31, 2026, significantly improving from a net loss of ₹38.82 lakh in the previous year. The company's total revenue for FY26 increased to ₹88.69 lakh, up from ₹49.37 lakh in FY25, driven by higher revenue from operations and other income. The Board of Directors approved the audited financial results at a meeting held on July 03, 2026.

Financial Performance

For the quarter ended March 31, 2026, the company recorded a net loss of ₹43.59 lakh, compared to a net loss of ₹18.73 lakh in the same quarter of the previous year. Revenue from operations for the quarter stood at ₹20.48 lakh, while other income contributed ₹9.48 lakh. Total expenses for the quarter were ₹59.68 lakh, primarily attributed to other expenses amounting to ₹59.66 lakh.

On an annual basis, revenue from operations grew to ₹55.30 lakh from ₹46.73 lakh in the prior year. Other income surged to ₹33.39 lakh in FY26 from ₹2.64 lakh in FY25. Total expenses for the year decreased slightly to ₹84.53 lakh from ₹86.08 lakh in the previous year.

Balance Sheet and Cash Flows

The company's total assets as of March 31, 2026, stood at ₹72.01 lakh, a significant increase from ₹30.37 lakh in the previous year. This rise was driven by a substantial increase in other current assets, which reached ₹43.23 lakh, and cash and cash equivalents, which grew to ₹20.21 lakh. Total current liabilities increased to ₹66.79 lakh, largely due to other current liabilities of ₹65.02 lakh.

Cash and cash equivalents at the end of FY26 were ₹20.21 lakh, compared to ₹5.57 lakh at the end of FY25. Net cash generated from operating activities for the year was ₹0.50 lakh, while investing activities provided a net inflow of ₹39.83 lakh, primarily from the sale of investments. Financing activities resulted in a net outflow of ₹23.00 lakh due to loan repayments.

Auditor's Report and Key Disclosures

M/s. A N K H & Associates, Statutory Auditors, issued an audit report with an unmodified opinion. However, the auditors drew attention to several emphasis of matter paragraphs. The entire management team changed during the financial year as part of a strategic reorganization, though operations continue on a going concern basis.

The company claimed an expenditure of ₹50,00,000 towards stamp duty and Form SH-7 filing fees as revenue expenditure, relying on a judicial precedent, despite potential contrary interpretations by tax authorities. Additionally, all remaining employees separated from the company during the year, leading to the reversal of the unutilized provision of ₹5 hundred for retirement benefits. Consequently, the company has zero active headcount on its payroll as of March 31, 2026.

The auditor also noted a non-compliance with Regulation 6 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, regarding the filling of a vacancy for the Company Secretary and Compliance Officer. This was rectified on June 22, 2026, with the appointment of a new officer. Furthermore, the company used accounting software for the financial year that did not have the feature of recording an audit trail (edit log) facility.

Financial Results Summary