IGC Industries Faces Financial Scrutiny as Auditors Resign Amid Concerns
IGC Industries Limited is experiencing severe financial difficulties and regulatory scrutiny. The company's statutory auditors, M/s ADV & Associates, resigned on August 14, 2025, after issuing a disclaimer of opinion on the Q1 FY2026 financial results. Key concerns include questionable use of rights issue proceeds, unexplained payments, potential rule violations, and doubts about the company's ability to continue as a going concern. The company reported zero revenue and a marginal loss for Q1 FY2026, following a net loss of ₹6.17 crore in FY2024-25. A rights issue in November 2024 increased the paid-up equity share capital to ₹3,472.00 crore. The situation is likely to attract regulatory attention from SEBI and the Ministry of Corporate Affairs.
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IGC Industries Limited , formerly known as IGC Foils Limited, is facing significant financial challenges and regulatory scrutiny following the resignation of its statutory auditors and the release of its latest financial results.
Auditor Resignation and Disclaimer of Opinion
In a major development, M/s ADV & Associates, the statutory auditors of IGC Industries, submitted their resignation on August 14, 2025. This resignation comes on the heels of their disclaimer of opinion on the company's financial results for the quarter ended June 30, 2025.
The auditors cited several material concerns that prevented them from forming a basis for their review conclusion:
Questionable Rights Issue Proceeds: Out of the ₹42.22 crore raised through a rights issue, advances amounting to ₹20.72 crore were given to various suppliers without proper documentation.
Unexplained Payment: A payment of ₹20.00 crore was made to CNX Corporation Limited without supporting documents or evidence of services received.
Misuse of Funds: The utilization of the rights issue proceeds was not in line with the objectives stated in the offer letter filed with the stock exchange.
Potential Rule Violations: The company accepted ₹41.53 crore from various individuals, which may contravene the Companies (Acceptance of Deposits) Rules, 2014.
Going Concern Issues: Continuous losses across all quarters in financial years 2024-25 and 2023-24 raise substantial doubt about the company's ability to continue as a going concern.
Financial Performance
The financial results for the quarter ended June 30, 2025, paint a grim picture of the company's performance:
| Particulars | Q1 FY2026 (₹ in lakhs) | Q4 FY2025 (₹ in lakhs) |
|---|---|---|
| Revenue from Operations | 0.00 | 0.00 |
| Total Expenses | 0.00 | 5.44 |
| Net Profit/(Loss) | (0.00) | 1.74 |
| EPS (Basic) | (0.00) | 0.01 |
The company reported zero revenue from operations and a marginal loss for the quarter ended June 30, 2025. This follows a pattern of poor financial performance, with the company reporting a net loss of ₹6.17 crore for the financial year 2024-25.
Rights Issue and Capital Structure
IGC Industries completed a rights issue on November 22, 2024, issuing 3,24,80,000 equity shares at ₹13.00 per share (including a premium of ₹3.00 per share). This increased the company's paid-up equity share capital to ₹3,472.00 crore as of March 31, 2025, up from ₹224.00 crore in the previous year.
Regulatory Implications
The resignation of the auditors and the disclaimer of opinion on the financial results are likely to attract regulatory attention. The Securities and Exchange Board of India (SEBI) and the Ministry of Corporate Affairs may scrutinize the company's financial dealings, particularly the utilization of rights issue proceeds and the potential violations of deposit rules.
Investors and stakeholders of IGC Industries Limited should closely monitor further developments as the company navigates through these financial and regulatory challenges. The company's ability to address the auditors' concerns and improve its financial position will be crucial for its future prospects.
Historical Stock Returns for IGC Industries
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| +0.98% | -4.64% | +1.32% | -50.16% | -73.40% | -84.43% |
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