Ethos uses Rs 206.03 crore for working capital by September 2026

Ethos Limited (Ethos) used Rs 206.03 crore of its Rs 409.91 crore rights-issue proceeds for working-capital requirements by September 30, 2026. Total utilisation, including Rs 3.75 crore of issue expenses, was Rs 209.79 crore, leaving Rs 200.12 crore unutilised and temporarily invested in deposits.

How did Ethos use its rights-issue proceeds?

Ethos used Rs 206.03 crore for working-capital requirements as of September 30, 2026, against Rs 310 crore proposed for that purpose in the rights issue. The issue was completed during the quarter ended September 30, 2025, when Ethos issued 22,77,250 equity shares of face value Rs 10 each at Rs 1,800 per share.

The rights issue raised gross proceeds of Rs 409.91 crore. Of the total, Rs 406.11 crore was allocated between working capital and general corporate purposes, while estimated issue-related expenses were Rs 3.79 crore, excluding taxes.

Ethos also used Rs 3.75 crore for issue-related expenses by September 30, 2026, compared with the estimated Rs 3.79 crore. The remaining Rs 3.53 lakh of issue expenses was held in the monitoring-agency account maintained with HDFC Bank.

How much of Ethos's rights issue remained unutilised?

Ethos had Rs 200.12 crore of unutilised rights-issue proceeds as of September 30, 2026. This total comprised Rs 200.08 crore unspent under the working-capital and general-corporate-purpose allocations, plus Rs 3.53 lakh remaining under the issue-expense head.

The unspent working-capital allocation was Rs 103.97 crore, while the full Rs 96.11 crore earmarked for general corporate purposes remained unutilised. No utilisation was reported under the general-corporate-purpose head in the September 30, 2026 disclosure.

Ethos said the unutilised proceeds at September 30, 2026 were temporarily invested in deposits. The filing does not state a separate timetable for use of the Rs 103.97 crore balance for working capital or the Rs 96.11 crore set aside for general corporate purposes.

How did Ethos's working-capital balances change during the half year?

Ethos's inventory increased to Rs 821.59 crore at September 30, 2026 from Rs 695.49 crore at March 31, 2026, a rise of Rs 126.10 crore. The consolidated cash-flow statement recorded an Rs 126.10 crore cash outflow from the increase in inventories during the half year ended September 30, 2026.

That inventory-related outflow was higher than the Rs 69.11 crore outflow recorded in the half year ended September 30, 2025. The reported increase in inventory occurred alongside the use of Rs 206.03 crore of rights proceeds for the working-capital purpose by September 30, 2026, although the filing does not allocate the proceeds to specific inventory purchases.

Trade receivables rose to Rs 25.05 crore at September 30, 2026 from Rs 17.50 crore at March 31, 2026. The half-year cash-flow statement showed an Rs 7.79 crore outflow from the increase in receivables, compared with an Rs 4.89 crore outflow in the corresponding 2025 period.

Cash flow from operations was Rs 17.46 crore in the half year ended September 30, 2026, before net income-tax payments. After net tax payments of Rs 23.17 crore, net cash used in operating activities was Rs 5.71 crore, compared with net cash generated from operating activities of Rs 60.49 crore in the half year ended September 30, 2025.

Where did Ethos report cash and deposits at September-end?

Ethos reported cash and cash equivalents of Rs 145.54 crore at September 30, 2026, compared with Rs 144.08 crore at the beginning of the financial year. The September-end balance included Rs 46 crore in fixed deposits with original maturity of less than three months and Rs 49.91 crore in mutual funds.

Other bank balances were Rs 239.54 crore at September 30, 2026, down from Rs 517.57 crore at March 31, 2026. The filing separately says the unutilised rights proceeds were temporarily invested in deposits, but it does not reconcile those proceeds to individual balance-sheet cash, deposit or bank-balance lines.

The cash-flow statement included Rs 57.50 crore under investment in bank deposits having original maturity of more than three months for the half year ended September 30, 2026. In the corresponding half year ended September 30, 2025, the same line showed Rs 375.15 crore.

What business activities are included in Ethos's consolidated results?

Ethos reports retail trading of premium and luxury watches, accessories and other luxury items, including related after-sales services, as one operating segment. Management said the chief operating decision maker assesses the financial performance and position of the company as a whole, so separate segment disclosures were not furnished under Indian Accounting Standard 108.

The consolidated results at September 30, 2026 included subsidiaries Cognition Digital LLP, Ethos Lifestyle Private Limited, Micron Watch Services Private Limited and Ficus Trading LLC. They also included Pasadena Retail Private Limited as a joint venture and Silvercity Brands AG as an associate.

On April 30, 2026, Ethos acquired 1,89,480 equity shares in Ethos Lifestyle Private Limited for approximately Rs 20.26 crore from promoter and director Pranav Shankar Saboo. The transaction raised Ethos's holding in that subsidiary from 75.05% to 77.42%.

Conclusion

Ethos had deployed Rs 206.03 crore, or the largest reported share of its rights-issue proceeds, towards working-capital requirements by September 30, 2026. At the same date, inventory was Rs 126.10 crore higher than at March 31, 2026, while total rights-proceeds utilisation including expenses reached Rs 209.79 crore.

The next disclosure to watch is the use of the Rs 103.97 crore still earmarked for working capital and the Rs 96.11 crore reserved for general corporate purposes. Ethos said the Rs 200.12 crore total unutilised balance was temporarily invested in deposits at September-end, but disclosed no deployment deadline for either remaining allocation.