Active Clothing Co has announced that it is considering raising funds through convertible warrants, marking a potential strategic financial move by the apparel company.

Fundraising Initiative

The company's board is evaluating the option of issuing convertible warrants as a mechanism to raise capital. Convertible warrants are financial instruments that give holders the right to purchase company shares at a predetermined price within a specified timeframe, providing flexibility for both the issuer and investors.

Strategic Implications

This fundraising consideration reflects Active Clothing Co's approach to accessing capital markets through alternative financial instruments. The convertible warrant structure offers potential benefits including:

• Deferred equity dilution compared to direct share issuance
• Potential for capital raising at premium valuations
• Flexibility in timing of equity conversion
• Attractive investment option for warrant holders

Market Context

The consideration of convertible warrants as a fundraising tool demonstrates the company's exploration of various capital market instruments to meet its financial requirements. This approach allows the company to evaluate market conditions and investor appetite before finalizing its capital raising strategy.

The announcement indicates Active Clothing Co's proactive approach to financial planning and its commitment to exploring diverse funding mechanisms to support its business operations and growth initiatives.

Active Clothing Co Limited, a prominent player in the clothing industry, has recently found itself in the spotlight of regulatory scrutiny. The company has disclosed that it received a Goods and Services Tax (GST) show cause notice from the Joint Commissioner CGST (Audit), Ludhiana, covering the audit period from 2019-20 to 2023-24.

Details of the Notice

According to the company's disclosure, the show cause notice, numbered 216/GST/2025-26/JC and dated September 26, 2025, involves a significant sum:

Company's Response

Active Clothing Co has taken a proactive approach in addressing this regulatory challenge:

1. High Court Petition: The company has approached the jurisdictional High Court to quash the notice.
2. Consultation: Active Clothing Co is currently consulting with tax and legal advisors to ensure accurate reporting and an appropriate response.
3. Impact Assessment: The company expects no material financial or operational impact from this notice at this stage.

Transparency Measures

In line with good governance practices and regulatory requirements, Active Clothing Co has made this disclosure voluntarily. This action aligns with the recent amendments to SEBI's Listing Obligations and Disclosure Requirements (LODR) Regulations, specifically the changes introduced by SEBI Circular No. SEBI/HO/CFD/CFD-PoD-1/P/CIR/2023/123 dated July 13, 2023.

Outlook

While the adjudication is pending, Active Clothing Co maintains that the show cause notice was issued without providing the company reasonable time to be heard. The company's board took note of this notice on November 14, 2025.

As the situation unfolds, stakeholders will be keenly watching how Active Clothing Co navigates this regulatory challenge and its potential implications on the company's operations and financial standing.