Mom's Belief US deal creates Rs 19.778 crore goodwill

Mom's Belief US Inc. acquired 100% of City Pro Group Inc. on September 18, 2026 for $2.06 million, creating Rs 19.778 crore of provisional goodwill at September 30, 2026 and a reported Rs 12.071 crore cash outflow, net of acquired cash, in the half year.

What did Mom's Belief US pay for City Pro Group?

Mom's Belief US agreed total consideration of $2,060,630.62, or Rs 19.739 crore, for all shares in City Pro Group on September 18, 2026. City Pro Group became a wholly owned subsidiary of Mom's Belief US and, as a result, a step-down wholly owned subsidiary of Rays of Belief Limited from that date.

Of the total consideration, $800,000, or Rs 7.679 crore at the closing exchange rate, is deferred. Rays of Belief Limited recorded this amount under current other financial liabilities as at September 30, 2026, so it was not treated as an immediate cash payment.

The consolidated cash-flow statement reports Rs 12.071 crore for the acquisition of City Pro Group, net of cash acquired, within investing activities for the half year ended September 30, 2026. The Rs 7.679 crore deferred amount was excluded from investing cash flows because it was a non-cash transaction, meaning the reported cash outflow is not the full contractual consideration.

Why did the acquisition create Rs 19.778 crore of goodwill?

Mom's Belief US recognised Rs 19.778 crore of goodwill provisionally because it accounted for the transaction under Indian Accounting Standard 103, Business Combinations. The goodwill was recognised as at September 30, 2026, 12 days after the effective acquisition date of September 18, 2026.

The filing does not provide a purchase-price allocation across City Pro Group's identifiable assets and liabilities, or an operational rationale for the goodwill balance. It states that the provisional accounting may be adjusted during the one-year measurement period from September 18, 2026, leaving the final allocation unresolved at September 30, 2026.

Consolidated goodwill was Rs 24.840 crore at September 30, 2026, compared with Rs 4.992 crore at March 31, 2026. The Rs 19.848 crore increase was close to the Rs 19.778 crore provisional goodwill disclosed for City Pro Group, although Rays of Belief Limited did not separately reconcile every movement in the goodwill balance.

How did City Pro Group affect Mom's Belief US results?

City Pro Group's results were included in the consolidated financial statements from September 18, 2026, giving it only a partial-period contribution to the quarter ended September 30, 2026. Rays of Belief Limited says this inclusion makes consolidated figures for the quarter and half year not comparable with the corresponding 2025 periods.

The USA geographical segment reported revenue of Rs 14.563 crore for the quarter ended September 30, 2026, up from Rs 12.823 crore in the June 2026 quarter and Rs 10.244 crore in the September 2025 quarter. The USA accounted for 53.76% of consolidated quarterly external revenue, ahead of India at 46.24%.

For the half year ended September 30, 2026, USA revenue was Rs 27.386 crore, compared with Rs 11.140 crore a year earlier. USA segment expenses increased to Rs 23.315 crore from Rs 9.921 crore, while segment result before finance costs rose to Rs 4.258 crore from Rs 1.350 crore.

These comparisons show that USA revenue, expenses and segment result increased year on year, but the filing does not isolate City Pro Group's revenue, expense or profit contribution for September 18 to September 30. The 2025 USA comparison also included Mom's Belief US only from June 23, 2025, its own acquisition date.

How was the City Pro Group purchase funded?

Mom's Belief US received a $2 million investment from Rays of Belief Limited during the half year ended September 30, 2026. Rays of Belief Limited recorded the investment in its standalone financial statements under applicable Indian Accounting Standards, but did not expressly link each dollar of that investment to the City Pro Group consideration.

At group level, financing activities generated Rs 131.833 crore of net cash during the half year, compared with Rs 2.862 crore in the prior-year period. Financing cash flow included Rs 122.164 crore of security-premium proceeds and Rs 5.316 crore of share capital issued, partly offset by Rs 12.123 crore of share-issue expenses.

Rays of Belief Limited also issued unlisted redeemable non-convertible debentures of Rs 15 crore during the September 2026 quarter, backed by the Managing Director's personal guarantee. The outstanding debentures were classified as current borrowings, while consolidated current borrowings stood at Rs 19.936 crore at September 30, 2026, against Rs 0.861 crore at March 31, 2026.

What changed in the group's cash position after the deal?

Consolidated cash and cash equivalents were Rs 21.660 crore at September 30, 2026, compared with Rs 3.255 crore at March 31, 2026. The Rs 18.406 crore half-year increase followed Rs 131.833 crore of financing inflow, despite Rs 80.004 crore of investing outflow and Rs 33.424 crore used in operating activities.

Investing outflows included Rs 66.153 crore invested in bank deposits with original maturities above three months and the Rs 12.071 crore City Pro Group acquisition payment. Bank balances other than cash equivalents were Rs 69.141 crore at September 30, 2026, compared with Rs 2.988 crore at March 31, 2026.

Consolidated total assets reached Rs 206.566 crore at September 30, 2026, up from Rs 51 crore at March 31, 2026. USA segment assets were Rs 48.654 crore, or 23.55% of total assets, compared with Rs 14.828 crore at June 30, 2026, but the filing does not disclose a separate City Pro Group asset balance.

Conclusion

The City Pro Group transaction added a wholly owned US business to Mom's Belief US for $2.06 million, including $800,000 of deferred consideration. Its immediate accounting effect was Rs 19.778 crore of provisional goodwill, while the cash-flow statement recorded Rs 12.071 crore paid net of acquired cash and the USA segment supplied 53.76% of consolidated revenue in the September 2026 quarter.

The next disclosed accounting milestone is the end of the one-year measurement period beginning September 18, 2026, when the provisional Rs 19.778 crore goodwill can be adjusted. Future geographical disclosures will also show whether USA revenue, which was Rs 27.386 crore in the half year ended September 30, 2026, changes after City Pro Group is included for a full reporting period.