Vishal Nirmiti earmarks Rs 75 crore for working capital

Vishal Nirmiti plans to deploy Rs 75 crore of fresh-offer net proceeds for working capital in Fiscal 2027, its largest identified use of proceeds. The amount would fund 45.62% of the projected Rs 164.4146 crore requirement, while the company had Rs 581.7682 crore of outstanding project value on June 30, 2026.

Why is Vishal Nirmiti earmarking Rs 75 crore for working capital?

Vishal Nirmiti is earmarking Rs 75 crore for fund-based working-capital requirements because its construction and manufacturing projects require cash to meet operating expenses. The company uses fund-based bank facilities for cash flows and non-fund-based facilities, including bank guarantees, as security under bid terms. The Rs 75 crore allocation is part of a fresh offer of up to Rs 145 crore, alongside Rs 19 crore proposed for term-loan repayment or prepayment.

Working capital is current assets less current liabilities excluding borrowings. Vishal Nirmiti reported working capital of Rs 59.1504 crore in Fiscal 2026, compared with Rs 52.3206 crore in Fiscal 2025 and Rs 60.4918 crore in Fiscal 2024. The Fiscal 2026 amount rose from Fiscal 2025 as current assets increased to Rs 214.5264 crore from Rs 196.1182 crore, exceeding the increase in current liabilities excluding borrowings to Rs 155.376 crore from Rs 143.7976 crore.

The proposed working-capital deployment will not create fixed or tangible assets. Vishal Nirmiti proposes to deploy the net proceeds for its stated objects in Fiscal 2027, but fresh-offer expenses were yet to be finalised until determination of the offer price. The company also states that its funding requirement and deployment estimates have not been appraised by a bank, financial institution or independent agency.

How does the project pipeline affect Vishal Nirmiti working-capital needs?

Vishal Nirmiti’s project pipeline affects working-capital needs because inventory, work in progress and customer receivables must be financed during execution. Its order book increased to Rs 682.4667 crore in Fiscal 2026 from Rs 383.3565 crore in Fiscal 2025 and Rs 359.7915 crore in Fiscal 2024. The company disclosed a compound annual growth rate of 37.73% for the order book across the three fiscal years.

Ongoing projects had a total contract value of Rs 1,138.5705 crore, excluding goods and services tax, and an outstanding value of Rs 581.7682 crore on June 30, 2026. Prestressed concrete, or PSC, sleepers represented Rs 306.8708 crore, or 52.75%, of the outstanding value. Infrastructure service work involving mild-steel pipes and liners was the second-largest category, with Rs 146.8034 crore outstanding.

The Rs 581.7682 crore outstanding project value does not itself ensure that the Fiscal 2027 funding requirement will arise as projected. Vishal Nirmiti identifies its order-book status, work-in-progress position and delivery schedules as factors affecting inventory. It also says that raw-material prices, interest rates, market conditions, competition and other commercial factors may require revisions to the deployment schedule.

What changes create the Fiscal 2027 working-capital requirement?

Vishal Nirmiti projects a Fiscal 2027 working-capital requirement of Rs 164.4146 crore, an increase of Rs 105.2642 crore, or 178%, from Rs 59.1504 crore in Fiscal 2026. Projected current assets are Rs 271.488 crore, up from Rs 214.5264 crore, while projected current liabilities excluding borrowings are Rs 107.0734 crore, down from Rs 155.376 crore.

The projected increase reflects inventories rising to Rs 139.8021 crore from Rs 111.4213 crore and trade receivables rising to Rs 96.4726 crore from Rs 63.2102 crore. At the same time, trade payables are projected to decline to Rs 41.0374 crore from Rs 81.8537 crore. This combination increases the operating cash requirement because more funds are tied up in assets and less is supported by supplier credit.

Vishal Nirmiti’s board approved the incremental and proposed Fiscal 2027 working-capital requirements on August 17, 2026. Its statutory auditors certified the current and projected working-capital information on September 24, 2026. The holding periods used for the projections were calculated over 365 days for each fiscal year.

Which assumptions must hold for Vishal Nirmiti’s plan?

Vishal Nirmiti’s Fiscal 2027 projection assumes inventory days will decrease to 153 from 178 in Fiscal 2026, while trade-receivable days will rise to 65 from 59. Inventory days represent the period for which inventory is held, and trade-receivable days represent the assumed period for collection from customers. The projected funding requirement therefore depends on the company holding less inventory time-wise while carrying a larger inventory balance.

The projection also assumes lower supplier and operating-liability support. Trade-payable days are expected to decline to 75 in Fiscal 2027 from 126 in Fiscal 2026, while other-current-liability days are expected to decrease to 46 from 69. Vishal Nirmiti says it intends to reduce trade payables to lower financing costs associated with vendor arrangements and negotiate improved pricing terms.

Loans are projected to decline to Rs 1.2935 crore in Fiscal 2027 from Rs 7.4159 crore in Fiscal 2026, with the associated holding period falling to one day from eight days. Other current assets are projected at Rs 25.7886 crore, compared with Rs 25.703 crore in Fiscal 2026, despite an assumed reduction in holding days to 21 from 28. These estimates remain management projections based on Fiscal 2026 figures and prevailing or expected business conditions.

How will Vishal Nirmiti fund the projected requirement?

Vishal Nirmiti plans to fund the Rs 164.4146 crore projected requirement with Rs 75 crore of IPO proceeds, Rs 69.4146 crore of internal accruals or equity, and Rs 20 crore of bank borrowings. IPO proceeds are the largest disclosed funding component, accounting for 45.62% of the projected requirement. Internal accruals or equity would account for 42.22%, while bank borrowings would account for 12.16%.

Vishal Nirmiti had sanctioned cash-credit limits of Rs 44 crore across Canara Bank, HDFC Bank, State Bank of India and Kotak Mahindra Bank as of June 30, 2026. The disclosed outstanding balances totalled Rs 39.8677 crore: Rs 18.6797 crore at Canara Bank, Rs 17.9068 crore at HDFC Bank, Rs 0.5582 crore at State Bank of India and Rs 2.723 crore at Kotak Mahindra Bank.

If net proceeds are insufficient or actual expenditure exceeds earmarked amounts, Vishal Nirmiti says it may use internal accruals, issue additional equity or seek debt from existing or other lenders, subject to applicable law. Surplus funds after the stated objects may be used for general corporate purposes, but that amount cannot exceed 25% of the fresh offer under the Securities and Exchange Board of India’s Issue of Capital and Disclosure Requirements Regulations.

Conclusion

Vishal Nirmiti’s Rs 75 crore working-capital deployment is designed to meet a projected increase in cash tied up in inventory and receivables while trade payables decline. The plan is linked to an order book of Rs 682.4667 crore in Fiscal 2026 and Rs 581.7682 crore of outstanding project value on June 30, 2026, but its outcome depends on project execution, customer collections and supplier-credit assumptions.

The next disclosed step is deployment of the net proceeds during Fiscal 2027. The final prospectus is expected to update fresh-offer expenses and the general-corporate-purpose allocation, while Fiscal 2027 inventory days of 153, receivable days of 65 and payable days of 75 remain the operating assumptions underlying the Rs 164.4146 crore requirement.