India Power Corporation Limited auditor flags unrecognised claims

India Power Corporation Limited received an adverse review conclusion for the six months ended September 30, 2026 because it did not recognise Rs 8,852.99 crore of insolvency claims admitted by the Resolution Professional, which the reviewer said overstated standalone profit before tax and understated liabilities.

Why did India Power receive an adverse review conclusion?

India Power received the adverse conclusion because liabilities for claims of Rs 8,852.99 crore admitted by the Interim Resolution Professional and Resolution Professional, or RP, had not been recognised as of September 30, 2026. S S Kothari Mehta & Co. LLP said this omission overstated profit before tax and understated liabilities in the standalone unaudited financial results by that amount.

The reviewer concluded that the standalone statement was not prepared in accordance with the recognition and measurement principles of Indian Accounting Standards, or Ind AS, specified under Section 133 of the Companies Act, 2013. It also said the statement did not disclose information required under Regulation 33 of the Securities and Exchange Board of India listing regulations.

The conclusion followed a review under Standard on Review Engagements 2410, which requires moderate assurance through inquiries and analytical procedures rather than the scope of a statutory audit. The reviewer stated that such a review does not enable it to obtain assurance that it would identify all significant matters that an audit could identify.

How large are India Power's admitted CIRP claims?

India Power disclosed Rs 8,852.99 crore of admitted claims out of Rs 9,498.02 crore submitted by creditors to the RP as of September 30, 2026. The admitted portion is therefore the amount specifically identified by the reviewer as absent from recognised standalone liabilities.

India Power said the necessary provisions or adjustments for the claims would be made upon the final outcome of the Corporate Insolvency Resolution Process, or CIRP. It also said invoices from operational creditors relating to the period before the insolvency commencement date of May 15, 2026 had been recorded during CIRP for transparency, presentation and accounting-standard compliance.

The difference between the admitted claims and the reported standalone balance-sheet amounts shows the scale of the accounting issue, although the reviewer has said reported liabilities are incomplete. India Power reported Rs 883.91 crore of current and non-current liabilities at September 30, 2026, plus a separate regulatory deferral credit balance of Rs 85.38 crore.

India Power entered CIRP after the National Company Law Tribunal, or NCLT, Hyderabad Bench admitted an application on May 15, 2026. The application was filed by a financial creditor of Meenakshi Energy Limited, for which India Power had provided a corporate guarantee; an appeal against the NCLT order was pending before the National Company Law Appellate Tribunal at the reporting date.

What did India Power report for the September 2026 half year?

India Power reported consolidated revenue from operations of Rs 381.63 crore for the six months ended September 30, 2026, compared with Rs 361.61 crore for the six months ended September 30, 2025. Consolidated profit before tax rose to Rs 19.67 crore from Rs 9.66 crore, while profit for the period increased to Rs 14.19 crore from Rs 6.82 crore.

The consolidated profit increase came as total income rose to Rs 384.40 crore from Rs 368.92 crore and total expenses increased to Rs 373.99 crore from Rs 375.77 crore. Regulatory income declined to Rs 9.26 crore from Rs 16.70 crore over the same two half-year periods.

These consolidated figures are separate from the standalone statement subject to the adverse review conclusion. In the standalone cash-flow statement, India Power reported profit before tax of Rs 22.57 crore for the six months ended September 30, 2026, compared with a loss before tax of Rs 134.77 crore in the corresponding 2025 period; the reviewer said unrecognised admitted claims overstated that standalone measure.

India Power said it operates primarily in the single business segment of generation and distribution of power, so segment reporting was not applicable. It said regulatory income or expense includes unbilled costs or obligations expected to be recovered or refunded through future tariff adjustments, based on applicable regulatory provisions and orders.

What does India Power's going-concern uncertainty mean?

India Power's ability to continue as a going concern depends on a viable resolution plan from a prospective investor and continued support from financial creditors, operational creditors and customers. The reviewer said those conditions represented a material uncertainty that may cast significant doubt on India Power's ability to continue as a going concern.

The reviewer did not modify its conclusion for the going-concern matter, while India Power prepared the September 30, 2026 financial statements on a going-concern basis. The RP said it expected to make every endeavour to protect and preserve the value of India Power's property and manage operations as a going concern.

India Power remains under the Section 14 moratorium of the Insolvency and Bankruptcy Code, 2016 until CIRP is completed, the NCLT approves a resolution plan under Section 31, or the NCLT orders liquidation under Section 33. Since the May 15, 2026 CIRP admission order, the board's powers have been suspended and management has vested in the RP.

Conclusion

India Power's reported standalone results for September 2026 must be read alongside the adverse conclusion: Rs 8,852.99 crore of admitted CIRP claims had not been recognised, leading the reviewer to state that liabilities were understated and profit before tax was overstated. Separately, consolidated profit for the half year rose to Rs 14.19 crore from Rs 6.82 crore, but those reported figures do not remove the accounting issue identified in the standalone review.

The next disclosed process steps concern the CIRP. India Power published Form G inviting expressions of interest from prospective resolution applicants on September 2, 2026, and issued the request for resolution plan, evaluation matrix and information memorandum to eligible applicants on October 3, 2026; the key matters to watch are resolution-plan submissions, the NCLT process and any provisions or adjustments made after the final CIRP outcome.