Maxgrow auditor flags unvalued Ultravolt OCDs, ₹71.46 crore exposure

Maxgrow India Limited’s auditor highlighted that the company’s Rs 75.10 lakh investment in Ultravolt Power Private Limited optionally convertible debentures remained carried at cost without an independent valuation at September 30, 2026, while associated claims, contractual rights and guarantees had aggregate maximum exposure of Rs 71.46 crore.

What did Maxgrow’s auditor flag in the September 2026 review?

Maxgrow’s statutory auditor flagged the absence of an independent valuation for 75,93,900 Optionally Convertible Debentures, or OCDs, of Ultravolt Power Private Limited as of September 30, 2026. The OCD investment was acquired for Rs 75.10 lakh under agreements dated June 30, 2025 and July 7, 2025, and remained recorded at cost in the standalone accounts.

B N K & Associates included the matter in an emphasis-of-matter paragraph in its limited review report dated November 13, 2026. The report covered Maxgrow’s unaudited standalone financial results for the quarter and six months ended September 30, 2026, and said its review conclusion was not modified in respect of the valuation matter.

The auditor said a limited review is narrower than an audit and provides moderate assurance rather than an audit opinion. It concluded that, except for possible effects of matters described under emphasis of matter and other matters, nothing had come to its attention suggesting the September 2026 standalone statement omitted required disclosures or contained a material misstatement.

What is Maxgrow’s Rs 71.46 crore Ultravolt-related exposure?

Maxgrow disclosed aggregate maximum exposure of Rs 71.46 crore from acquired claims, contractual rights and corporate guarantees connected with transactions involving Ultravolt Power Private Limited. The company said it had received corporate guarantees from Ushdev Windpark Private Limited and Hurricane Windfarm Private Limited in connection with those arrangements.

The Rs 71.46 crore maximum exposure is separate from the Rs 75.10 lakh consideration for the 75,93,900 Ultravolt OCDs. Maxgrow’s filing identifies the debenture acquisition as an investment at cost, while the larger figure relates to the broader set of claims, contractual rights and guarantees under the underlying agreements.

The filing does not disclose a recovery amount, settlement date, individual guarantee amount or financial information for either guarantor. It therefore describes Rs 71.46 crore as the maximum exposure arising from the arrangements, not as cash received or a recognised recovery from the claims as at September 30, 2026.

Why does the missing valuation matter for Maxgrow’s accounts?

Maxgrow said appropriate measurement of the Ultravolt OCD investment and recoverability of the acquired claims are subject to Indian Accounting Standard 109, or Ind AS 109, and the outcome of relevant contractual and legal proceedings. The company had not obtained an independent valuation by September 30, 2026, the reporting date used for its limited review.

The absence of an external valuation means the filing does not provide an independently determined value against the Rs 75.10 lakh cost at which the OCDs are carried. The auditor specifically said no independent valuation had been performed to assess the investment’s appropriate carrying value at the September 30, 2026 reporting date.

Maxgrow said the transactions had been approved by its board and that an independent legal opinion had been obtained. Those disclosures address the transaction process, but the filing does not state that either board approval or the legal opinion established the OCD valuation or resolved the recoverability of the claims worth up to Rs 71.46 crore.

What do Maxgrow’s September 2026 standalone results show?

Maxgrow reported standalone total income of Rs 1.70 crore for the quarter ended September 30, 2026, compared with Rs 1.03 lakh in the preceding quarter ended June 30, 2026. Total comprehensive income was Rs 6.07 lakh in the September quarter, compared with Rs 22,000 in the June quarter.

For the six months ended September 30, 2026, Maxgrow reported total income of Rs 1.77 crore and total comprehensive income of Rs 61,000. In the corresponding six months ended September 30, 2025, it reported total comprehensive loss of Rs 70.97 lakh, changing from a reported loss in the earlier period to positive comprehensive income in the latest half year.

Maxgrow said it is primarily engaged in the sale of goods, with consultancy income constituting an insignificant share of revenue, and operates in a single business segment. The September 2026 results do not provide a separate Ultravolt segment, and the filing does not attribute any part of the Rs 1.70 crore quarterly income to the OCDs, claims or guarantees.

What balance-sheet and post-CIRP disclosures accompany the audit flag?

Maxgrow reported standalone investments of Rs 1,789.95 crore at September 30, 2026, unchanged from March 31, 2026. The statement of assets and liabilities does not break down that investment balance sufficiently to identify the portion represented by the Rs 75.10 lakh Ultravolt OCD acquisition.

Standalone cash and cash equivalents were Rs 82.02 lakh at September 30, 2026, compared with Rs 2.01 lakh at the beginning of the financial year. For the six months ended September 30, 2026, Maxgrow reported net cash generated from financing activities of Rs 91.97 lakh and net cash used in investing activities of Rs 2.18 lakh.

The auditor also referred to a post-Corporate Insolvency Resolution Process, or CIRP, requirement to reduce promoter shareholding below 90%. Maxgrow’s note said promoter holding had been rectified to 90%, while the auditor said it had been informed that the company had complied with the requirement to reduce the holding to less than 90%.

Conclusion

Maxgrow’s September 2026 filing identifies two connected unresolved matters: the Rs 75.10 lakh Ultravolt OCD investment has no independent valuation, and claims, contractual rights and guarantees related to the arrangements carry Rs 71.46 crore of aggregate maximum exposure. The auditor did not modify its limited-review conclusion, but expressly drew attention to the missing valuation and the company linked recoverability to contractual, legal and accounting outcomes.

The next item to watch is whether Maxgrow obtains an independent valuation for the 75,93,900 OCDs and records any resulting assessment under Ind AS 109. The filing also leaves the relevant contractual and legal proceedings unresolved, so their outcomes, along with any update on claims or guarantee recovery, will determine how the Rs 71.46 crore maximum exposure develops.