Ishan Dyes and Chemicals Ltd received an advisory letter from the National Stock Exchange of India Limited (NSE) regarding a delay in implementing the lock-in period for warrants allotted on a preferential basis. The exchange identified a non-compliance with the 3rd proviso of Regulation 167(1) of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, which mandates a one-year lock-in from the date of allotment for unlisted convertible securities or warrants.

The company allotted 45,84,872 warrants on September 20, 2025. However, the lock-in was enforced from December 6, 2025, resulting in a delay of more than two months from the date of allotment. The company attributed this delay to operational issues faced while obtaining the International Securities Identification Number (ISIN) and completing corporate action procedures.

Despite the delay, the company confirmed that no purchase or sale of the affected warrants occurred during the period between allotment and the implementation of the lock-in. The NSE issued the advisory letter on June 11, 2026, which was received by the company the following day.

The disclosure, made pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, clarified that no fines or penalties were imposed. Consequently, the advisory letter has no material impact on the financials or operations of Ishan Dyes and Chemicals Ltd. The exchange has advised the company to exercise due diligence in future applications to avoid repetition of such violations.

Details of the Non-Compliance

The company has been directed to place the advisory letter before its Board of Directors at the upcoming board meeting.

Ishan Dyes & Chemicals Limited reported a net loss of ₹56.16 lakh for the financial year ended March 31, 2026, reversing the net profit of ₹15.80 lakh in FY25. Revenue from operations declined to ₹15.51 lakh for FY26, down from ₹267.44 lakh in the previous year. The company's statutory auditors, M/s A R Sulakhe & Co, issued a qualified opinion on the financial results, highlighting material discrepancies in asset valuation and provisioning that would have further increased the net loss.

The auditors identified that the company advanced a loan of ₹1,460.22 lakhs to a related party whose net worth has turned negative due to ongoing legal issues. Under Ind AS 109, the company is required to assess this asset for impairment using the Expected Credit Loss (ECL) model. The management has not made any provision for this loan. The auditors stated that a provision of ₹1,460.22 lakhs is required, which would have increased the net loss for the year and reduced reserves and surplus by the same amount.

Additionally, the auditors found that certain inventories (Finish Goods) held against specific customer contracts were valued at Net Realisable Value (NRV) amounting to ₹2759.49 lakhs. Since the NRV exceeded the cost, the inventories were carried above cost, which is not in conformity with Ind AS 2. The auditors opined that these inventories should be measured at cost, which would have lowered the inventory value by ₹284.78 lakhs. This adjustment would have further increased the net loss for the year by ₹284.78 lakhs and reduced total equity.

For the quarter ended March 31, 2026, the company reported a net loss of ₹60.83 lakh, compared to a net profit of ₹62.05 lakh in the same quarter of the previous year. Revenue from operations for the quarter stood at ₹131.06 lakh, compared to ₹93.82 lakh in Q4FY25. Total income for the quarter rose to ₹131.06 lakh from ₹93.82 lakh in the prior year quarter.

The Board of Directors, in its meeting held on May 28, 2026, also appointed M/s. H D Panchal & Co., Chartered Accountants, as the Internal Auditor for the financial year ending March 31, 2027. The firm is not related to any of the Directors of the Company. The audited financial results were reviewed by the Audit Committee and approved by the Board.

Financial Performance Summary