Avro India forfeits Rs 2.85 crore as its warrants lapse

Avro India Limited forfeited Rs 2.85 crore of upfront warrant subscriptions after promoter-group and remaining non-promoter holders did not pay the balance required for conversion. The company transferred the amount to capital reserve under other equity and included the conversion and lapses in earnings-per-share calculations for the quarter and half year ended September 30, 2026.

Why did Avro India forfeit Rs 2.85 crore of warrant money?

Avro India forfeited the money because warrant holders did not complete the payment needed to convert their warrants into equity shares. The company had issued preferential convertible warrants during financial year 2024-25 with a total issue value of Rs 12.75 crore, split between Rs 6 crore for the promoter group and Rs 6.75 crore for the non-promoter group.

The warrant terms required an upfront payment equal to 25% of the issue price, while the remaining 75% was due for conversion. Avro India received Rs 1.50 crore upfront from the promoter group and Rs 1.35 crore from the non-promoter group. The filing identifies unpaid balance consideration, rather than any change in warrant terms, as the reason the relevant warrants lapsed.

The forfeited amount was Rs 2.85 crore in total: Rs 1.50 crore related to promoter-group warrants and Rs 1.35 crore related to non-promoter warrants. Avro India transferred the entire amount to capital reserve under other equity, so the filing records it as a reserve within equity rather than revenue from operations.

When did Avro India's promoter warrants lapse?

Avro India's promoter-group warrants lapsed with effect from August 11, 2026. The company said the holders neither exercised the conversion option nor paid the outstanding consideration within the stipulated period ending August 10, 2026, triggering forfeiture of their Rs 1.50 crore upfront subscription.

The non-promoter outcome involved both a conversion and a lapse during the period covered by the September 2026 results. At its April 18, 2026 meeting, Avro India's board allotted 1,06,090 equity shares on a pre-split basis after receiving the remaining 75% of the issue price for warrants converted by non-promoter holders.

However, the remaining non-promoter warrants did not convert because the balance consideration was not received. Avro India said Rs 1.35 crore of upfront subscription against those lapsed warrants was forfeited. The disclosure does not state the number of non-promoter warrants that remained unconverted or the identity of the holders.

The timeline also coincided with a share subdivision. Avro India's board approved a change in face value from Rs 10 per share to Rs 1 per share on March 25, 2026, shareholders approved it on April 18, 2026, and the record date was May 5, 2026. The company therefore described the 1,06,090 shares issued on conversion as pre-split shares.

How did the lapsed warrants affect Avro India's equity and EPS?

Avro India said the conversion and lapse of warrants were included in the calculation of basic and diluted earnings per share, or EPS, for the quarter and half year ended September 30, 2026, in accordance with Indian Accounting Standard 33, Earnings Per Share. Standalone basic EPS for the September quarter was Rs 0.07 and diluted EPS was Rs 0.07, based on equity shares with a face value of Rs 1 each.

The accounting destination of the forfeiture was capital reserve under other equity. In Avro India's standalone balance sheet, other equity stood at Rs 78.425 crore at September 30, 2026, compared with Rs 75.804 crore at March 31, 2026. The movement cannot be attributed solely to the Rs 2.85 crore transfer because the filing does not provide a reconciliation of every component of other equity.

Standalone equity share capital was Rs 13.4171 crore at September 30, 2026, versus Rs 13.3111 crore at March 31, 2026. The increase follows the disclosed allotment of 1,06,090 pre-split shares from non-promoter warrant conversion, although the financial statement does not separately quantify the share-capital effect of that allotment.

Avro India also stated that it retrospectively adjusted all presented periods, including corresponding EPS figures, for the May 5, 2026 subdivision. Comparisons of per-share figures in the results therefore reflect the change from a Rs 10 face value to a Rs 1 face value.

What do Avro India's September 2026 results show alongside the forfeiture?

Avro India's consolidated revenue from operations was Rs 29.5199 crore for the quarter ended September 30, 2026, compared with Rs 25.3428 crore in the preceding quarter and Rs 20.9021 crore a year earlier. The financial statements were unaudited, while the warrant-forfeiture disclosure formed part of the notes accompanying the results.

The plastic moulded furniture and granules segment generated Rs 21.8446 crore of revenue before inter-segment revenue in the September quarter, compared with Rs 12.1359 crore from plastic waste recycling. After inter-segment eliminations, consolidated revenue from operations was Rs 29.5199 crore, meaning reported group revenue differed from the sum of gross segment revenue.

Consolidated profit before tax was Rs 1.765 crore in the September 2026 quarter, compared with Rs 0.7645 crore in the June 2026 quarter and Rs 1.4451 crore in the September 2025 quarter. The filing does not link this movement to the Rs 2.85 crore capital-reserve transfer, which Avro India recorded within other equity rather than revenue.

For the half year ended September 30, 2026, consolidated revenue from operations was Rs 54.8627 crore, compared with Rs 42.5702 crore in the corresponding prior-year half. The plastic waste recycling segment reported Rs 16.7464 crore of half-year revenue before eliminations, whereas the same segment had no reported revenue in the corresponding prior-year half.

Conclusion

Avro India's disclosure establishes that Rs 2.85 crore paid upfront by promoter-group and non-promoter holders was retained after their associated warrants lapsed. The promoter-group lapse became effective on August 11, 2026, while the non-promoter outcome included conversion of some warrants into 1,06,090 pre-split shares and forfeiture of Rs 1.35 crore for the remainder. The company recorded the aggregate forfeiture in capital reserve under other equity.

The unresolved point to watch is whether Avro India provides the number of non-promoter warrants that remained unconverted, which the September 30, 2026 filing does not disclose. Investors can also track subsequent disclosures for a reconciliation of other equity following the Rs 2.85 crore capital-reserve transfer and the April 18, 2026 warrant conversion.