Lunolux Limited has disclosed that 100% of its shareholding in Eureka Forbes Limited is encumbered, covering the entire 62.55% promoter stake held through itself and its parent, Lunolux Midco Limited. The disclosure, filed under Regulation 31(1) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, confirms that all 121,041,730 equity shares are pledged or subject to non-disposal undertakings. This comprehensive encumbrance secures a $92 million facility, highlighting the promoter group’s reliance on leverage for financing.

The filing, dated August 4, 2026, and signed by Director Christodoulos Patsalides, serves as a completeness disclosure for transactions previously executed via the depository system. It details the security structure established under a Facility Agreement dated May 1, 2024. Lunolux Midco created a pledge over 100% of its shares in Lunolux Limited in favor of CSCGlobal Capital Markets (Singapore) Pte. Ltd., acting as security agent for lenders including Barclays Bank PLC. Simultaneously, Lunolux provided a non-disposal undertaking over its direct holding in Eureka Forbes.

Encumbrance Structure

The encumbrance involves two distinct layers: a pledge over the promoter entity’s shares and restrictions on the target company’s shares. Catalyst Trusteeship Limited acts as the onshore security agent for the pledged equity shares of Eureka Forbes. The total encumbered shares amount to 121,041,730, representing 62.55% of the total paid-up share capital as per the June 30, 2026 quarter data.

Financial Metrics and Debt Coverage

The underlying facility amounts to USD 92,000,000, equivalent to ₹7,682,000,000 based on an exchange rate of 1 USD = 83.50 INR as of May 7, 2024. The value of the shares on the date of the event was ₹54,444,570,154, calculated using the closing price on May 7, 2024. This results in a security cover ratio of 7.087, indicating substantial collateral value relative to the debt amount. The proceeds were utilized to refinance an existing term loan facility from September 20, 2021, originally secured by Bank of New York Mellon.

What the Numbers Show

The disclosure clarifies that while the initial pledge of 64,950,000 shares (33.57%) was created in May 2024, a top-up pledge of 11,418,729 shares (5.90%) was added on July 28, 2026, due to collateral shortfall clauses. With nearly two-thirds of the company’s voting capital now fully encumbered at both the parent and subsidiary levels, any further decline in share price could trigger additional margin calls. The high security cover ratio of 7.087 provides a buffer, but the non-disposal undertaking restricts the promoter’s ability to manage liquidity through share sales.

Eureka Forbes Limited reported an 11.3% increase in revenue for the Financial Year 2025-26 (FY26), driven by consistent double-digit growth across its core water purifier business and emerging categories like robotics and air purifiers. The company’s adjusted EBITDA margin expanded to 12.2% in FY26, up from 6.3% in FY23, reflecting improved operational efficiency and premiumisation strategies. Shareholders are invited to the 17th Annual General Meeting (AGM) on Wednesday, August 19, 2026, at 12:00 Noon IST via Video Conferencing (VC) or Other Audio-Visual Means (OAVM). The meeting agenda includes the adoption of audited standalone and consolidated financial statements, the re-appointment of Sahil Dalal as a Non-Executive Non-Independent Director, and the ratification of remuneration for Cost Auditors.

The Integrated Annual Report, dispatched electronically on July 25, 2026, highlights a strategic shift towards a diversified health and hygiene portfolio. While Electric Water Purifiers (EWP) remain the largest revenue contributor at 43% of FY26 turnover, service revenue accounted for 16%, and vacuum cleaners contributed 10%. Emerging segments, including robotics, water softeners, and air purifiers, collectively represented 31% of revenue, underscoring the success of the company’s diversification strategy. Management noted that robotic vacuum cleaners grew nearly threefold over the last two years, contributing nearly two-thirds of total vacuum cleaner revenues in FY26.

Financial performance was bolstered by robust cash generation, with Free Cash Flow (FCF) reaching ₹237 crore in FY26, representing a cash conversion ratio of 148% of Profit After Tax (PAT). This strong liquidity position allowed the company to move from a net debt of ₹32 crore in FY23 to a net cash surplus of ₹443 crore in FY26. Despite this financial strength, the Board proposed retaining the entire PAT of ₹160 crore (standalone) and did not recommend a dividend for FY26, aligning with its policy to reinvest profits into growth initiatives, innovation, and working capital optimisation.

Key Financial Metrics (FY26)

Note: Reported PAT at ₹160 crore for FY26. Consolidated PAT includes non-controlling interests.

Strategic Outlook and Operational Highlights

The company’s transformation journey has transitioned from "Turnaround" to "Take-Off," with a target to double revenue to ₹5,400–5,600 crore and triple EBITDA to ₹800–850 crore by FY30. Key drivers include democratising access to safe drinking water through affordable entry-point products and expanding the service ecosystem. The company strengthened its service network, comprising over 9,000 technicians across 19,500 pin codes, achieving record-high performance in service turnaround times and customer satisfaction metrics.

Innovation remained a core focus, with the launch of smart water purifiers, robotic cleaning stations with AI-enabled automation, and advanced air purifiers. The company also emphasised sustainability, achieving a 4% reduction in greenhouse gas emissions (Scope 1 and 2) and diverting over 1,000 metric tonnes of e-waste and plastic waste from landfills. Both manufacturing facilities in Dehradun and Bengaluru received the GC-Mark “Green Company” certification.

What the Numbers Show

A notable divergence exists between the company’s operational profitability and its bottom-line reporting due to exceptional items. While the core business delivered strong margin expansion and cash generation, the consolidated statement of profit and loss recorded an exceptional loss of ₹4,044.18 lakh. This charge stems from the incremental impact on retirement benefits following the notification of new Labour Codes by the Government of India in November 2025. Excluding this one-time regulatory impact, the underlying operational health remains robust, with consistent double-digit revenue growth and expanding operating margins indicating successful execution of the multi-category strategy.

AGM and Voting Details

Pursuant to Section 108 of the Companies Act, 2013 and Regulation 44 of the SEBI Listing Regulations, remote e-voting will commence on Sunday, August 16, 2026, at 09:00 AM IST and conclude on Tuesday, August 18, 2026, at 05:00 PM IST. The cut-off date for determining voting eligibility is Wednesday, August 12, 2026. Members holding shares on the cut-off date can cast their votes electronically via the National Securities Depository Limited (NSDL) platform. The facility for appointment of proxies is not available for this virtual meeting.

In accordance with Regulation 36(1)(b) of the SEBI Listing Regulations, 2015, Eureka Forbes Limited has sent a letter providing a weblink and QR Code for accessing the Notice of the 17th Annual General Meeting and the Integrated Annual Report for Financial Year 2025-26 to those Members who have not registered their email address with the Company, Registrar and Share Transfer Agent, or the Depositories. The same documents are available on the Company's website at www.eurekaforbes.com .