Ajwa Projects’ Receivable Cycle Reaches 178 Days; Rs 4 Crore Planned

Ajwa Projects’ receivable cycle reached 178 days for the period ended June 30, 2026, from 82 days in FY 2024, while trade receivables rose to Rs 24.551 crore. Ajwa Projects plans to deploy Rs 4 crore of net offer proceeds to working-capital requirements in FY 2026-27.

Why did Ajwa Projects’ receivable cycle reach 178 days?

Ajwa Projects’ collection period lengthened because its fabrication, erection and construction contracts use milestone-based billing rather than immediate sales collection. Under this mechanism, invoices are raised after specified project stages are completed and then pass through inspection, technical scrutiny and client approval before payment is released. Ajwa Projects says this creates a timing gap between spending on project execution and receiving revenue.

The disclosed receivable cycle increased in each reported annual period before reaching 178 days in the period ended June 30, 2026. The measure rose from 82 days in FY 2024 to 117 days in FY 2025 and 156 days in FY 2026. Ajwa Projects attributes the longer cycle to its client mix, including industrial companies, refineries, power plants, steel facilities and infrastructure projects, where multi-layered certification procedures can delay payment releases.

The change matters because trade receivables increased by Rs 16.843 crore between FY 2024 and the period ended June 30, 2026, while cash and cash equivalents fell from Rs 65.60 lakh to Rs 9.02 lakh. Trade receivables are amounts due from customers, whereas cash and cash equivalents are immediately available liquidity. The prospectus does not report overdue-receivable ageing or customer defaults, so the disclosure establishes a longer collection period rather than the quality of individual balances.

How large is Ajwa Projects’ working-capital requirement?

Ajwa Projects’ net working-capital requirement rose from Rs 8.9866 crore in FY 2024 to Rs 27.7323 crore for the period ended June 30, 2026, an increase of Rs 18.7457 crore. Net working capital is current assets less current liabilities, representing funding tied up in assets expected to be used, sold or collected within the operating cycle after near-term obligations are deducted.

Current assets increased from Rs 13.8961 crore in FY 2024 to Rs 36.0525 crore by the period ended June 30, 2026. Over the same interval, current liabilities rose from Rs 4.9095 crore to Rs 8.3202 crore. Receivables led the increase in current assets, while inventories grew from Rs 3.7138 crore to Rs 8.1209 crore. Inventory holding days also rose from 40 days in FY 2024 to 59 days in the June 2026 period, adding a separate execution-funding requirement.

Funding sources changed alongside the higher requirement. Bank borrowings represented the full Rs 8.9866 crore requirement in FY 2024, while the June 2026 requirement was funded by Rs 9.677 crore of bank borrowings, Rs 3.9304 crore of loans from directors, relatives and others, and Rs 14.1249 crore of internal accruals or existing net worth. This funding mix means the increase in working capital was not met solely through bank facilities.

How will Ajwa Projects use Rs 4 crore of offer proceeds?

Ajwa Projects plans to deploy the full Rs 4 crore earmarked from net offer proceeds towards working-capital requirements during FY 2026-27. Its estimate puts FY 2026-27 net working-capital requirements at Rs 34.0003 crore, comprising Rs 41.47 crore of current assets less Rs 7.4698 crore of current liabilities. The Rs 4 crore allocation represents about 12% of the projected requirement.

The FY 2026-27 funding plan identifies Rs 25.4099 crore from internal accruals or existing net worth, Rs 3.9304 crore from loans from directors, relatives and others, Rs 66 lakh from existing bank borrowings, and Rs 4 crore from the offer. The prospectus defines internal accruals as including funds raised from the offer, cash accruals for the year and short-term debt, if any, making this category broader than retained operating cash alone.

Ajwa Projects also proposes repayment of existing term loan and business loan facilities from the offer. Ajwa Projects states that the working-capital allocation is intended to replace liquidity previously supported by those facilities, so project funding is not interrupted by debt repayment. The prospectus separately says any shortfall in funding requirements will be met through internal accruals or unsecured loans, making the availability of those sources relevant to execution.

What must happen for Ajwa Projects’ FY 2026-27 estimate to hold?

Ajwa Projects assumes that trade receivable days will decline to 134 in FY 2026-27 from 178 days in the period ended June 30, 2026. The 134-day estimate is 44 days below the latest reported period, but remains above FY 2025’s 117 days and FY 2024’s 82 days. Ajwa Projects describes the assumption as near the average receivable cycle of the past three years and links it to a more efficient collection approach.

The projection also assumes 44 inventory days, 23 trade-payable days, 21 days for other current liabilities and 15 days for short-term provisions. Compared with the period ended June 30, 2026, inventory days are expected to decline by 15 days and trade-payable days by 17 days. Lower trade-payable days mean less supplier credit, so meeting the projected Rs 34.0003 crore requirement depends on both faster customer collections and the stated funding mix.

The operational basis for the estimate is an outstanding order book of about Rs 42.4345 crore, certified by D G M S & Co., Chartered Accountants, on October 5, 2026. Ajwa Projects says each order can require procurement, workshop fabrication, workforce and machinery deployment, erection, installation and commissioning before collections occur. Ajwa Projects reported revenue of Rs 12.4083 crore in the first quarter ended June 30, 2026, but this section of the prospectus does not provide a full-year FY 2026-27 turnover figure.

Conclusion

Ajwa Projects’ planned Rs 4 crore working-capital deployment is most directly linked to trade receivables of Rs 24.551 crore and a 178-day collection cycle as of June 30, 2026. The wider requirement also reflects inventory and multi-site execution needs, with net working-capital requirements rising from Rs 8.9866 crore in FY 2024 to Rs 27.7323 crore in the June 2026 period.

The next disclosed benchmark is Ajwa Projects’ FY 2026-27 plan, which assumes receivable days fall to 134 and net working-capital requirements reach Rs 34.0003 crore, with the full Rs 4 crore allocation deployed during that year. Ajwa Projects’ Board and Audit Committee will monitor offer-proceeds use, and statutory auditors are to certify the statement of funds used until all proceeds are utilised.