Shivam Autotech Limited , a prominent player in the auto components sector, has taken a significant step to bolster its financial position. The company's Board of Directors has given the green light for the issuance of Secured, Unlisted, Redeemable, Non-Convertible Debentures (NCDs) worth up to ₹25 crores through private placement.

Key Details of the NCD Issuance

Terms and Conditions

The NCDs will be secured through a Supplemental Deed to the Debenture Trust Deed and a Deed of Hypothecation. The Board of Directors or a designated committee will determine the specific tenure, including any moratorium period, as well as the allotment and maturity dates.

Regulatory Compliance

This decision was made during a Board meeting held on August 8, 2025, which commenced at 09:30 A.M. and concluded at 10:15 A.M. The company has duly informed the National Stock Exchange of India Ltd and BSE Limited about this development, in compliance with Regulation 30 of the SEBI Listing Regulations.

Impact and Implications

This move by Shivam Autotech Limited to raise funds through NCDs could potentially provide the company with additional capital for various corporate purposes. The 12% annual interest rate offered on these debentures might attract investors looking for fixed-income opportunities in the current market environment.

Mr. Shakti Mahana, Company Secretary & Compliance Officer of Shivam Autotech Limited, confirmed the board's decision in the regulatory filing. The company assures that all rights, privileges, and interests associated with these NCDs will be in accordance with the terms of the debenture trust deed to be established between the company and the debenture trustee.

As Shivam Autotech Limited moves forward with this financial strategy, market observers will be keen to see how the company utilizes these funds to drive growth and strengthen its position in the auto components industry.

Shivam Autotech Limited , a key player in the auto components sector, faces headwinds as CARE Ratings reaffirms its credit ratings while revising the long-term outlook from Stable to Negative. This development comes in the wake of persistent financial challenges and operational hurdles faced by the company.

Financial Performance

The company reported a total operating income of ₹453.98 crore, with a PBILDT (Profit Before Interest, Lease, Depreciation, and Tax) margin of 9.78%. However, Shivam Autotech continued to post net losses, amounting to ₹48.04 crore.

Deteriorating Financial Metrics

One of the primary concerns highlighted in the rating action is the deterioration of Shivam Autotech's overall gearing. The company's gearing ratio worsened to 10.94x from 7.29x in the previous year, indicating a significant increase in leverage. The total outstanding debt stood at ₹344.55 crore, reflecting the company's strained financial position.

Operational Challenges

Several key issues are impacting Shivam Autotech's performance:

1. Underutilization of Manufacturing Capacities: The company is struggling with underutilization of its production facilities, leading to under-recovery of fixed costs.

2. Stretched Liquidity Position: The firm's liquidity remains under pressure, affecting its ability to manage working capital efficiently.

3. Revenue Concentration Risk: A significant portion of Shivam Autotech's revenue, approximately 40%, comes from a single client, Hero MotoCorp Limited, exposing the company to concentration risk.

Regulatory Concerns

Adding to the company's challenges, Shivam Autotech received a GST show cause notice for a tax liability of ₹50.10 crore for the fiscal years 2018-2021. This development poses additional financial risk and will be a key factor to monitor in the coming months.

Positive Factors

Despite these challenges, Shivam Autotech benefits from several positive factors:

1. Experienced Promoters: The company is led by seasoned professionals with extensive experience in the auto component sector.

2. Strong Operational Linkages: Its strong ties with Hero MotoCorp provide a stable business foundation.

3. Locational Advantages: The strategic locations of its manufacturing facilities offer operational benefits.

Outlook

CARE Ratings' revision of the long-term outlook to Negative reflects concerns about Shivam Autotech's ability to improve its financial and operational performance in the near term. The rating agency notes that the company's PBILDT is insufficient to cover interest expenses, leading to sustained losses at the net level and a stressed liquidity position.

The company is reportedly exploring fund-raising options to ease its liquidity constraints. The management expects an improvement in revenue, banking on better utilization of its capacity.

As Shivam Autotech navigates these challenges, stakeholders will be closely watching for signs of operational improvement and financial stabilization in the coming quarters.