Indag Rubber has received a second show cause notice from GST authorities regarding financial year 2022-23 liabilities. This latest communication, issued by the Office of the Joint Commissioner of Commercial Taxes in Bhiwadi, Rajasthan, demands a total of ₹1,77,144.

The disclosure was made on September 25, 2026, under Regulation 30 of SEBI (LODR) Regulations, 2015. The notice cites input tax credit wrongly availed or utilized under Section 73 of the CGST/RGST Act, 2017. This follows an earlier notice from Karnataka authorities issued in September 2026, which demanded a much higher sum of ₹24,99,618.

Liability Breakdown

The new demand comprises a principal tax differential and applicable interest. Unlike the previous notice, this specific demand is relatively minor in comparison. The breakdown is as follows:

Integrated GST (IGST) accounts for the vast majority of this specific demand. The company stated that there is no impact on its financials, operations, or other activities due to this communication.

Company Response

Indag Rubber plans to file an appropriate response to the show cause notice within the prescribed timelines. The management reiterated that the matter will not have any major impact on the business. This aligns with their stance on the earlier Karnataka notice, where they also noted no significant operational or financial repercussions.

What the Numbers Show

The combined disclosures reveal two distinct regulatory actions for the same fiscal year (FY23). The Karnataka notice, totaling ₹24,99,618, was primarily driven by IGST discrepancies amounting to over 96% of that total. In contrast, the new Rajasthan notice is roughly 7% of the value of the first notice. Both notices cite similar grounds of wrongly availed or utilized input tax credit, suggesting a potential systemic issue in ITC reconciliation for FY23 across different states, though the financial magnitude differs significantly.

Shareholders of Indag Rubber approved all six resolutions placed before them at the company’s 47th Annual General Meeting (AGM) held on August 12, 2026. The meeting, conducted via video conferencing, saw unanimous support from the promoter group and overwhelming backing from public shareholders across all items, including the adoption of financial statements for FY26 and the declaration of dividends.

Financial Performance and Dividend

During the chairman’s address, management disclosed that total income for FY26 stood at approximately ₹225 crore, down from ₹237 crore in FY25. However, profitability expanded significantly, with profit before finance cost and depreciation rising to ₹22.43 crore from ₹16.48 crore in the previous year. Profit after tax (PAT) increased by 46% to ₹12.38 crore against ₹8.42 crore in FY25.

The improvement was attributed to a more favorable raw material cost environment for most of the year and an improved product and channel mix. The Board recommended a final dividend of ₹1.50 per equity share, adding to an interim dividend of ₹0.90 per share already declared, resulting in a total payout of ₹2.40 per equity share with a face value of ₹2.

Strategic Shifts and Working Capital

Management highlighted a deliberate shift in revenue mix as a key driver behind the rebound in profitability. The company has systematically expanded its presence in the high-margin domestic aftermarket (private segment) while reducing reliance on low-margin, tender-based State Transport Undertaking (STU) business. Consequently, the STU’s share of turnover declined from 25% in FY15-16 to just 6% in FY25-26.

Operational efficiency also improved markedly. The working capital cycle reduced from 120 days five years ago to 70 days as of March 31, 2026. Receivable days dropped from 63 to 32 days, while payable days increased from 31 to 44 days. Inventory days remained stable at 80 days, down slightly from 82 days previously.

Resolutions Passed

The special business focused on board composition and auditor remuneration. Shareholders reappointed Mr. Shiv Vikram Khemka as a director retiring by rotation and Mr. Raj Kumar Agrawal as an independent director for a second five-year term. Additionally, the company secured approval for the ratification of cost auditor remuneration for FY27 and payment of commissions to non-executive directors for FY27 to FY29.

Voting Participation Analysis

Promoter and promoter group shareholders held 19,252,750 shares, representing approximately 73% of the total 26,250,000 shares outstanding as on the record date of August 5, 2026. The promoter group voted in favor of all resolutions where they were not interested parties, casting 100% of their eligible votes.

Public non-institutional shareholders, holding 6,997,250 shares, participated actively through remote e-voting. Only 3 out of 100 public shareholders attended the meeting via video conferencing, while the rest voted remotely between August 9 and August 11, 2026. No institutional investors were recorded as voting.

What the Numbers Show

The voting data reveals a distinct bifurcation in engagement levels between promoter and public shareholders regarding interested-party resolutions. For the reappointment of Mr. Shiv Vikram Khemka and the approval of non-executive director commissions, where promoters declared an interest, their voting participation dropped to zero. Consequently, these resolutions relied entirely on public shareholder support, which stood at roughly 1.85% of outstanding shares. In contrast, resolutions without promoter interest saw full promoter participation, driving the overall poll percentage to over 75%. This pattern highlights the structural dependency on promoter block voting for routine corporate approvals, while contested or interested items depend on minimal but sufficient public mandate.