SRF Limited has received a show cause notice from the Additional Commissioner, CGST & Central Excise, Vadodara-II Commissionerate, demanding ₹266.32 crore. The notice, issued under Section 73 of the Central Goods and Services Tax Act, 2017, pertains to alleged Input Tax Credit disallowances for FY23 and FY24.

The regulatory filing was made to BSE and NSE on October 1, 2026, pursuant to Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The show cause notice is dated September 29, 2026.

Nature of the dispute

The tax authority alleges that certain Input Tax Credit availed by SRF is not eligible due to a mismatch between ITC claimed in statutory GST returns and ITC reflected in the auto-generated statement available on the GST portal. Consequently, a demand for GST along with applicable interest and penalty has been proposed.

Company response

SRF stated that it is reviewing the show cause notice and will submit an appropriate response before the concerned authority. The company maintains that the allegations are not legally tenable and intends to contest the matter before the appropriate legal forum.

Regarding financial implications, SRF asserted that the show cause notice is not sustainable and will have no financial impact. The company did not disclose any specific provisions made against this demand in the filing.

What the numbers show

The demand of ₹266.32 crore covers two fiscal years, FY23 and FY24. The company’s assertion that there will be "no financial impact" suggests either a strong confidence in its legal position or that the amount is already provisioned, though the latter is not explicitly stated in the disclosure. The mismatch cited relates specifically to the reconciliation between filed returns and the portal-generated statement, a common area of scrutiny in recent GST audits.

SRF Limited promoter group entity KAMA Holdings Limited has sold 1,95,000 equity shares to its wholly owned subsidiary, KAMA Realty (Delhi) Limited. Executed as an off-market inter-se transfer on September 24, 2026, this transaction marks the fourth and final tranche of a planned internal restructuring.

This sale reduces KAMA Holdings' stake in SRF to 14,56,45,000 shares, representing 49.13% of the total share capital. KAMA Realty's holding increases correspondingly to 32,00,000 shares, or 1.08% of the equity, consolidating the promoter group's overall control without changing the total share count.

Transaction Details

The disclosure was filed under Regulation 29(2) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011. The mode of acquisition was an off-market inter-se transfer between group entities. This specific tranche follows earlier disclosures dated September 9, September 18, September 21, and September 23, 2026, regarding the proposed transfer of up to 32,00,000 equity shares.

Promoter Group Structure

Both KAMA Holdings and KAMA Realty are part of the promoter group of SRF Limited. Following the first tranche on September 18, 2026, where 10 lakh shares were transferred, a second tranche on September 21, 2026, involving 9.95 lakh shares, and a third tranche on September 23, 2026, involving 10,10,000 shares, this fourth tranche involves 1,95,000 shares. The cumulative volume of these four tranches now stands at 32,00,000 shares, reflecting a systematic internal reallocation of equity within the promoter group.

Other Persons Acting in Concert (PAC) include family members such as Mr. Arun Bharat Ram, Mr. Ashish Bharat Ram, and Mr. Kartik Bharat Ram, along with various group entities like SRF Altech Limited, SRF Global BV, and SRF Industries (Thailand) Ltd. The total equity share capital of SRF remains unchanged at ₹2,96,42,48,250, consisting of 29,64,24,825 equity shares of ₹10 each. The total diluted share capital stands at ₹2,96,65,76,350.

Valuation and Rationale

The aggregate value of the 32,00,000 shares transferred across the four tranches is ₹809.63 crore. The average price per share for the entire acquisition is ₹2,530.12, based on a pricing methodology agreed upon by the Transferor and Transferee pursuant to a Share Purchase Agreement dated September 9, 2026. The stated rationale for the transfer is to create self-sustainable profitability and facilitate business growth for KAMA Realty.

Tranche-wise Pricing Details

Regulatory Compliance

The acquisition falls under Regulation 10(1)(a)(iii) of the SEBI SAST Regulations, which provides an exemption from making an open offer for inter-se transfers among promoters or persons acting in concert. Prior intimation under Regulation 10(5) was submitted on September 9, 2026. The transaction does not result in any change in control, management, or ultimate beneficial ownership of SRF Limited.