Shivchem Agro’s Rs 135.56 lakh advance remains outstanding

Shivchem Agro Limited had Rs 135.56 lakh outstanding with promoter Sachin Agarwal for a proposed Rs 171.18 lakh property acquisition that remained in process of completion after March 31, 2026. The advance was one of two promoter-property payments outstanding at that date, but the other, Rs 102.42 lakh paid to Rohit Agarwal, was subsequently refunded after cancellation.

Why is Shivchem Agro’s Rs 135.56 lakh advance still outstanding?

Shivchem Agro says its Rs 135.56 lakh capital advance to Sachin Agarwal remains outstanding because the proposed property purchase is in the process of being completed. The company executed an agreement to sell with Sachin Agarwal on October 1, 2025 for land recorded as Killa No. 102, 191, 4-3, Khewat No. 609 and Khata No. 688 at Barhana village, Jhajjar, Haryana-121407.

The stated purchase consideration for the Jhajjar property is Rs 171.18 lakh, and the capital advance outstanding at March 31, 2026 was Rs 135.56 lakh. A capital advance is an amount paid toward acquiring a long-term asset before the acquisition is completed. The disclosed advance was therefore Rs 35.62 lakh below the stated purchase consideration at March 31, 2026.

The prospectus does not disclose a completion date, property-registration status, payment schedule or contractual treatment of the remaining Rs 35.62 lakh. It states that the Sachin Agarwal transaction remains incomplete and refers to a risk factor on possible forfeiture. Completion of the sale, or an alternative resolution under the agreement to sell, must occur for the outstanding capital advance to cease being reported as such.

How does the Sachin Agarwal transaction compare with the cancelled purchase?

The Sachin Agarwal advance remained outstanding, while Shivchem Agro cancelled a separate proposed purchase from promoter Rohit Agarwal and received the Rs 102.42 lakh advance back. Both agreements to sell were dated October 1, 2025 and both advances were outstanding at March 31, 2026, but the subsequent outcomes disclosed by the company differ.

The cancelled transaction concerned Flat No. 126, Regal Co-operative Housing Society Apartment, Starctor-9, Rohini, North West Delhi-110085. Shivchem Agro says Rohit Agarwal repaid the full Rs 102.42 lakh capital advance between April 1, 2026 and September 15, 2026 after the proposed purchase was cancelled. The Rs 102.42 lakh payment was Rs 25.34 lakh below the disclosed Rs 127.76 lakh purchase consideration.

The two capital advances totalled Rs 237.98 lakh at March 31, 2026. The Rs 135.56 lakh Sachin Agarwal advance represented Rs 33.14 lakh more than the Rs 102.42 lakh Rohit Agarwal advance. Following the disclosed repayment, the Sachin Agarwal payment is the remaining outstanding advance among the two promoter-property transactions identified in the prospectus.

Why is the outstanding payment a related-party transaction?

The outstanding payment is a related-party transaction because Sachin Agarwal is both a promoter and the managing director of Shivchem Agro. The company identifies Rohit Agarwal, Sachin Agarwal and Deepa Agarwal as its promoters, who collectively held 47,52,920 equity shares, representing 90.14% of the pre-issue paid-up equity share capital, as of the Red Herring Prospectus date.

Shivchem Agro discloses the agreements under the section dealing with promoters’ interests in company property. The company states that its promoters may be interested through their shareholdings and, where applicable, remuneration, expense reimbursement and unsecured loans. The property arrangement specifically makes Sachin Agarwal both the transferor of the Jhajjar property and a member of the promoter group holding 90.14% of pre-issue equity capital.

Sachin Agarwal is described in the prospectus as managing director with six years of experience. Rohit Agarwal is described as chairman and executive director with 12 years of experience. The company says that, except for matters disclosed in the restated financial statements and promoter-related sections, its promoters and promoter group do not have other interests in its business.

What does the disclosed forfeiture risk mean for Shivchem Agro?

The disclosed forfeiture risk means Shivchem Agro has identified the Rs 135.56 lakh advance as potentially exposed if the incomplete property transaction does not proceed under the applicable agreement. The prospectus expressly refers readers to a risk factor titled around capital advances paid to promoters for proposed property acquisitions, identifying the Sachin Agarwal transaction as incomplete.

The prospectus does not state a forfeiture trigger, penalty rate, security arrangement, deadline or probability of forfeiture. It also does not quantify a potential forfeiture separately from the Rs 135.56 lakh advance that remained outstanding. The source therefore identifies the risk but does not provide the contractual information needed to measure a potential loss.

The Rohit Agarwal transaction had a different disclosed outcome. Its Rs 102.42 lakh advance was repaid between April 1, 2026 and September 15, 2026 after cancellation, rather than being forfeited. That repayment records the result of a separate agreement and does not establish how the still-incomplete Sachin Agarwal transaction will be resolved.

What should readers monitor in the incomplete property purchase?

Readers should monitor whether Shivchem Agro completes the Jhajjar property acquisition from Sachin Agarwal and whether the Rs 135.56 lakh advance is converted into a completed asset purchase. The company’s latest stated position in the prospectus is that the acquisition is in process of completion and the advance remains outstanding after the March 31, 2026 balance date.

A subsequent company disclosure could clarify whether the Rs 171.18 lakh consideration is paid in full, adjusted or otherwise settled. It could also establish the transfer status of the Jhajjar property and the treatment of the Rs 35.62 lakh difference between the stated consideration and the capital advance reported at March 31, 2026.

The disclosed forfeiture risk also remains an unresolved matter until the agreement is completed or otherwise settled. Unlike the Rohit Agarwal transaction, which had been cancelled and refunded by September 15, 2026, the prospectus gives no date by which the Sachin Agarwal purchase must close. The reported status can persist only while the acquisition remains incomplete and the outstanding advance has not been recovered or applied to the property.

Conclusion

Shivchem Agro has Rs 135.56 lakh outstanding with promoter and managing director Sachin Agarwal against a proposed Rs 171.18 lakh Jhajjar property purchase. The comparison with the Rs 102.42 lakh Rohit Agarwal advance shows that the two October 1, 2025 promoter-property agreements have diverged: one was cancelled and refunded, while the other remains in process of completion.

The next development to watch is completion of the Sachin Agarwal property purchase or another disclosed settlement of the advance. Shivchem Agro states that the acquisition is being completed, but it does not disclose timing, registration details or the terms governing the stated forfeiture risk while Rs 135.56 lakh remains outstanding.