Krishna Institute of Medical Sciences Limited has announced a postal ballot seeking shareholder approval for a material related party transaction involving loans up to ₹150.00 crores to its subsidiary KIMS Hospital Bengaluru Private Limited (KHBPL). The company issued the notice on January 2, 2026, with the voting period scheduled from January 3, 2026, to February 1, 2026.

Postal Ballot Timeline and Process

The company has established a comprehensive timeline for the postal ballot process, with all voting conducted through electronic means only.

Transaction Details and Financial Structure

The proposed transaction involves extending loans to KHBPL, an unlisted subsidiary where Krishna Institute of Medical Sciences holds 80.00% of the paid-up equity shares. The loan structure includes a 12% interest rate, representing approximately 400 basis points above the company's average return on investments.

Historical Transaction Analysis

The company has provided detailed information about previous transactions with KHBPL, demonstrating the ongoing financial support for the subsidiary's operations.

Previous Financial Year (FY 2024-25)

Current Financial Year (FY 2025-26, up to Q2)

Strategic Rationale and Business Impact

The proposed loan aims to support KHBPL's operational scaling in the Bengaluru healthcare market. KHBPL, being a recently operational subsidiary, requires funding for working capital and additional capital expenditure needs. The subsidiary reported a turnover of nil and a net loss of ₹8.70 crores in the previous financial year, with a net worth of ₹71.50 crores.

The transaction represents 4.94% of the company's annual consolidated turnover of ₹3,035.00 crores for FY 2024-25. The Audit Committee, comprising entirely of Independent Directors, approved the transaction on December 29, 2025, confirming it as an arm's length transaction in the ordinary course of business.

Regulatory Compliance and Approval Process

The transaction requires shareholder approval as it constitutes a material related party transaction under Regulation 23 of SEBI Listing Regulations. The company has appointed Mr. Krishna Rao Inturi of IKR & Associates as the Scrutinizer for conducting the postal ballot process. MUFG Intime India Private Limited will provide the e-voting platform for shareholders.

The funding will be sourced partly from internal accruals and partly from borrowings, with the company's current borrowing rate at approximately 8.15%. The proposed 12% lending rate provides a favorable margin for the company while supporting the subsidiary's growth requirements in the competitive Bengaluru healthcare market.

Krishna Institute of Medical Sciences Limited has informed stock exchanges about a significant GST demand order received by its subsidiary company. The healthcare major disclosed this development under regulatory compliance requirements.

GST Demand Details

Spanv Medisearch Lifesciences Private Limited, a subsidiary of Krishna Institute of Medical Sciences Limited, received a demand order from the Office of the Deputy Commissioner of State Tax (GST) Nagpur. The order was issued under section 73 read with rule 100(1), 100(2), 100(3) & 142(5).

Nature of Alleged Violation

The GST demand order is based on alleged non-payment of GST on medicines consumed for inpatients during the specified financial year. The tax authorities have raised concerns about the company's GST compliance specifically related to pharmaceutical supplies used in inpatient care services.

Company's Response Strategy

Krishna Institute of Medical Sciences Limited stated that the company is currently examining the matter in consultation with its legal and tax advisors. The management has indicated that appropriate steps will be taken as per applicable laws to address the demand order.

Regulatory Compliance

The disclosure was made pursuant to Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. The company provided detailed information as required under Para A of Part-A of Schedule III, ensuring full transparency with stakeholders regarding this material development.

The company has assured that it will explore all available legal options, including filing an appeal before the relevant appellant authority. The subsidiary will work through appropriate legal channels to resolve this tax matter.