Infrax Renewables Limited working-capital gap nears Rs 49.07 crore

Infrax Renewables Limited projects a Rs 49.07 crore working-capital gap in FY 2027-28, nearly three times the Rs 16.66 crore recorded in FY 2025-26. The estimate reflects Rs 33.79 crore of inventory and Rs 30.76 crore of trade receivables as Infrax pursues business-to-business, or B2B, sales, trading and manufacturing.

Why is Infrax’s working-capital gap projected to reach Rs 49.07 crore?

Infrax’s projected gap rises because current assets are expected to grow faster than current liabilities by FY 2027-28. Working-capital gap is the difference between current assets and current liabilities, measuring funds tied up in day-to-day operations. Infrax projects current assets of Rs 67.73 crore and current liabilities of Rs 18.66 crore for FY 2027-28, producing the Rs 49.07 crore gap.

The expansion follows a sharp increase in the company’s historical requirement. Infrax reported a working-capital gap of Rs 1.12 crore in FY 2023-24, Rs 4.09 crore in FY 2024-25 and Rs 16.66 crore in FY 2025-26. The disclosed working-capital ratio also increased from 11.65% in FY 2023-24 to 13.43% in FY 2024-25 and 17.87% in FY 2025-26.

Infrax’s FY 2027-28 projection is management-based and depends on future events and management actions occurring as planned. The Board approved the incremental working-capital requirement and its assumptions through a resolution dated June 26, 2026. The company also states that its funding requirements and use of proceeds have not been appraised by a bank, financial institution or independent third party.

What is driving the higher inventory requirement?

Inventory is projected to become the largest current-asset component, increasing from Rs 12.72 crore in FY 2025-26 to Rs 20.23 crore in estimated FY 2026-27 and Rs 33.79 crore in projected FY 2027-28. Infrax says its inventory includes solar modules, inverters, galvanised iron pipes, alternating current/direct current distribution boxes, cables and related materials.

The projected increase is linked to a planned manufacturing facility and the expansion of trading activities. Infrax says the facility is intended to include production lines for solar-panel recycling and silver extraction, structures for solar roofing and mounting applications, and solar spares. Manufacturing would require raw materials and work-in-progress, while existing rooftop and ground-mounted solar orders would continue to require inventory for fulfilment.

Inventory days, which measure the average time inventory is held, declined from 66 days in FY 2024-25 to 50 days in FY 2025-26. Infrax expects inventory days to remain at 50 in FY 2026-27 before increasing to 52 in FY 2027-28. The company attributes the earlier reduction partly to B2B customers, which generally require less inventory holding than business-to-consumer, or B2C, customers, while the later increase reflects planned product trading alongside installation and commissioning operations.

How do B2B sales increase receivables and the funding gap?

B2B sales increase the projected funding gap because Infrax says it must offer longer credit periods to onboard and retain B2B customers. Trade receivables were Rs 22.98 lakh in FY 2024-25 and rose to Rs 11.39 crore in FY 2025-26. They are estimated at Rs 17.99 crore in FY 2026-27 and projected at Rs 30.76 crore in FY 2027-28.

The change in customer mix is material. B2B customers contributed 22.40% of revenue from operations in FY 2024-25 and 49.97% in FY 2025-26, compared with 3.85% in FY 2023-24. Infrax says it earns a significant portion of revenue in the third and fourth quarters, which leaves more receivables outstanding at the financial year-end when credit is extended to B2B customers.

Trade receivable days rose from 3 in FY 2024-25 to 23 in FY 2025-26 and are projected at 33 in FY 2026-27 and 34 in FY 2027-28. The measure is calculated using revenue from operations divided by average trade receivables. At the same time, trade payable days fell from 10 to 4 and are expected to remain at 4 through FY 2027-28, limiting the extent to which supplier credit offsets cash tied up in inventory and customer balances.

How does manufacturing and geographic expansion affect the plan?

Manufacturing and expansion into additional states are the stated operational conditions behind Infrax’s FY 2026-27 and FY 2027-28 estimates. Infrax says it plans to expand in Uttar Pradesh, Madhya Pradesh, Rajasthan and Maharashtra, and expects that offering credit to new customers in these markets will increase trade receivables. In FY 2025-26, the company had already expanded into Uttar Pradesh, Madhya Pradesh and Rajasthan.

The FY 2025-26 increase also followed the commencement of ground-mounted solar projects. Infrax says ground-mounted projects are generally larger than rooftop installations and require more inventory and execution resources. That year, inventories rose to Rs 12.72 crore from Rs 5.75 crore in FY 2024-25, while trade receivables increased to Rs 11.39 crore from Rs 22.98 lakh.

The manufacturing timeline is subject to required approvals. As of a certificate dated August 24, 2026, Infrax had yet to apply for a factory stability certificate, factory licence, electricity load sanction, Gujarat Pollution Control Board no-objection certificate, water connection or ground-water extraction approval, and fire-safety no-objection certificate. The planned increase in manufacturing inventory therefore depends on commissioning the facility after obtaining applicable approvals and installing machinery and equipment.

How does Infrax plan to fund the projected requirement?

Infrax plans to use Rs 17 crore of net proceeds from the initial public offering, or IPO, for estimated working-capital requirements across FY 2026-27 and FY 2027-28. The projected funding pattern shows Rs 4.65 crore from the IPO in FY 2026-27 and Rs 17 crore in FY 2027-28. The company says remaining working-capital needs will be met through internal accruals.

For FY 2027-28, the funding table assigns Rs 31.52 crore to internal accruals, Rs 17 crore to IPO proceeds and Rs 54.75 lakh to short-term borrowings. In FY 2025-26, Infrax funded Rs 12.47 crore of its Rs 16.66 crore gap through internal accruals and Rs 4.19 crore through short-term borrowings. The higher projected internal-accrual contribution must therefore be generated as the company expands operations.

Any funding shortfall will be met through internal accruals, according to Infrax. The company had not raised bridge loans proposed to be repaid from net proceeds as of the prospectus date. Because the offer size does not exceed Rs 50 crore, Infrax is not required to appoint a monitoring agency under Regulation 262(1) of the Securities and Exchange Board of India Issue of Capital and Disclosure Requirements Regulations, 2018; its Audit Committee will monitor use of proceeds.

Conclusion

Infrax’s Rs 49.07 crore FY 2027-28 working-capital projection reflects a business model requiring more stock and more customer credit than its earlier B2C-led rooftop solar activity. Inventory is projected to rise by Rs 21.06 crore and trade receivables by Rs 19.37 crore from FY 2025-26 to FY 2027-28, while payable days are expected to remain at four days.

The next operational markers are the planned manufacturing facility, the stated state-level expansion and the projected rise in B2B revenue. Whether the funding pattern holds depends on the company generating Rs 31.52 crore of internal accruals in FY 2027-28, obtaining the identified approvals for manufacturing operations, and managing receivable days that are projected to reach 34.