Indowind Energy Reports Q2 Results with Auditor Qualifications on Credit Loss and Arbitration Claims

Indowind Energy Limited , a prominent player in the renewable energy sector, has announced its unaudited financial results for the quarter ended September 30. The company's performance comes with notable auditor qualifications, highlighting potential financial concerns.

Financial Performance

For the quarter ended September 30, Indowind Energy reported the following consolidated results:

Particulars	Q2 (₹ in Lakhs)	Q2 PY (₹ in Lakhs)	YoY Change
Revenue from Operations	1,755.40	1,580.82	+11.04%
Total Revenue	1,774.33	1,591.89	+11.46%
Total Expenses	1,321.17	1,188.17	+11.19%
Profit Before Tax	453.16	403.72	+12.25%
Profit After Tax	457.71	441.70	+3.62%

The company's revenue from operations saw an 11.04% year-over-year increase, while the total revenue grew by 11.46%. The profit before tax improved by 12.25%, although the profit after tax showed a more modest growth of 3.62%.

Auditor Qualifications

The financial results come with significant auditor qualifications that investors and stakeholders should note:

Expected Credit Loss Allowance: The auditors have raised concerns regarding the non-recognition of expected credit loss allowance amounting to ₹248.13 lakhs. This pertains to receivables from TNEB Tirunelveli and BESCOM.
Arbitration Claim: The auditors have highlighted issues with the accounting treatment of a substantial arbitration claim against Suzlon Group, amounting to ₹9,083.39 lakhs.

These qualifications suggest potential financial risks and uncertainties that may impact the company's financial position and future performance.

Balance Sheet Highlights

As of September 30, Indowind Energy's consolidated balance sheet shows:

Particulars	September 30 (₹ in Lakhs)	March 31 (₹ in Lakhs)
Total Assets	32,402.01	30,539.78
Total Equity	28,676.61	27,961.21
Total Liabilities	3,725.40	2,578.59

The company's total assets have increased by 6.10% since the end of the previous fiscal year, while total equity has grown by 2.56%.

Cash Flow and Liquidity

The cash flow statement reveals:

Net cash used in operating activities: ₹(323.16) lakhs
Net cash used in investing activities: ₹(193.31) lakhs
Net cash generated from financing activities: ₹524.84 lakhs

The company ended the period with cash and cash equivalents of ₹179.91 lakhs, compared to ₹171.54 lakhs at the beginning of the financial year.

Rights Issue Announcement

In a separate announcement, Indowind Energy has approved a rights issue to raise up to ₹49.43 crore. Key details of the rights issue include:

Issue of 3,22,00,434 fully paid-up equity shares
Rights issue price: ₹15.35 per equity share
Rights entitlement ratio: 1:4 (1 new share for every 4 shares held)
Record date: November 19
Issue period: December 1 to December 9

This rights issue may provide the company with additional capital for its operations and growth initiatives.

Conclusion

While Indowind Energy has shown revenue growth and profitability in the reported quarter, the auditor qualifications raise important questions about the company's financial management and potential risks. The non-recognition of expected credit losses and the accounting treatment of the arbitration claim are areas that may require further scrutiny and resolution.

The upcoming rights issue may strengthen the company's financial position, but investors should carefully consider the auditor's qualifications and the company's plans to address these concerns before making investment decisions.

Stakeholders are advised to monitor the company's future disclosures and management's responses to the auditor's qualifications for a more comprehensive understanding of Indowind Energy's financial health and prospects.

1 Day	5 Days	1 Month	6 Months	1 Year	5 Years
-2.53%	+6.39%	+5.97%	-19.56%	-24.02%	+587.66%

Indowind Energy Limited has approved a rights issue to raise Rs 49.43 crore, as announced by the company's Rights Issue Committee. This move aims to bolster the company's capital base and fund its growth initiatives.

Key Details of the Rights Issue

Aspect	Details
Issue Size	3,22,00,434 fully paid-up equity shares
Issue Price	Rs 15.35 per share (including a premium of Rs 5.35)
Rights Entitlement Ratio	1:4 (1 new share for every 4 existing shares)
Record Date	November 19, 2025
Issue Opening Date	December 1, 2025
Issue Closing Date	December 9, 2025
Last Date for Market Renunciation	December 4, 2025

Impact on Share Capital

The rights issue, if fully subscribed, will lead to a significant increase in the company's outstanding equity shares:

Stage	Number of Shares
Pre-Issue	12,88,01,736
Post-Issue (Fully Subscribed)	16,10,02,170

Rights Entitlement Details

Eligible shareholders will receive rights entitlements in their demat accounts prior to the issue opening date. The Rights Entitlements will be tradable on the stock exchange under the ISIN INE227G20034.

Regulatory Compliance

The company has confirmed that the rights issue complies with the Securities and Exchange Board of India (SEBI) regulations, including the SEBI Circular SEBI/HO/CFD/DIL2/CIR/P/2020/13 dated January 22, 2020. The Rights Issue Committee has also approved the Letter of Offer, which will be filed with the National Stock Exchange of India Limited, BSE Limited, and submitted to SEBI.

This rights issue represents a significant corporate action for Indowind Energy Limited, providing existing shareholders an opportunity to increase their stake in the company at a predetermined price. Investors should carefully review the Letter of Offer for complete details before making any investment decisions.