Steelco Gujarat cash falls 72% despite Rs 14.58 crore inflow

Steelco Gujarat Limited ended the half year to September 30, 2026 with cash and cash equivalents of Rs 3.2516 crore, down 72% from Rs 11.7043 crore at March 31, 2026, despite recording Rs 14.5810 crore of equity-share proceeds in financing cash flow during the period.

How far did Steelco Gujarat's cash decline?

Steelco Gujarat's cash and cash equivalents fell by Rs 8.4527 crore during the half year ended September 30, 2026, reaching Rs 3.2516 crore from Rs 11.7043 crore at March 31, 2026. The decrease represented the combined effect of operating and investing cash outflows exceeding the financing inflow reported for the six-month period.

Net cash used in operating activities was Rs 14.8375 crore and net cash used in investing activities was Rs 8.1398 crore. Financing activities generated Rs 14.5246 crore, leaving the reported Rs 8.4527 crore net decrease after all three cash-flow categories.

The September 30 cash balance was lower even though the company completed a rights issue during the half year. The cash-flow statement records Rs 14.5810 crore of proceeds from issue of equity shares, while the accompanying notes disclose gross rights-issue proceeds of Rs 14.8966 crore.

What drove Steelco Gujarat's operating cash outflow?

Steelco Gujarat used Rs 14.8375 crore in operations during the half year ended September 30, 2026, after reporting a loss before tax of Rs 29.6868 crore. Depreciation and amortisation of Rs 2.3861 crore and finance cost of Rs 18.5690 crore were among the non-cash or financing-related adjustments, resulting in an operating loss before working-capital changes of Rs 8.8383 crore.

The largest disclosed working-capital outflow was a Rs 15.3545 crore increase in trade receivables. A Rs 8.2246 crore reduction in inventories and a Rs 10.1355 crore increase in trade payables partly offset that use of cash, while other financial and current assets increased by Rs 7.2601 crore.

Other current liabilities declined by Rs 1.9718 crore during the half year, adding to the working-capital cash requirement. After working-capital movements, cash used in operations was Rs 14.7646 crore before income tax; net income tax paid was Rs 7.30 lakh, taking total operating cash outflow to Rs 14.8375 crore.

The balance sheet shows trade receivables of Rs 36.7789 crore at September 30, 2026, compared with Rs 21.4246 crore at March 31, 2026. Inventories moved in the opposite direction, falling to Rs 35.6832 crore from Rs 43.9078 crore, consistent with the separate working-capital movements in the cash-flow statement.

Where did Steelco Gujarat use investing cash?

Steelco Gujarat used Rs 8.1398 crore in investing activities in the half year ended September 30, 2026. Purchases of property, plant and equipment, including capital work in progress and payables towards capital goods, amounted to Rs 4.2613 crore, while investment in fixed deposits accounted for Rs 4.4451 crore.

Sale of property, plant and equipment generated Rs 48.81 lakh, rental income from investment property added Rs 5.80 lakh, and interest received was Rs 2.05 lakh. These inflows did not offset the combined Rs 8.7064 crore spent on capital assets and fixed deposits.

Non-current assets rose to Rs 158.9588 crore at September 30 from Rs 152.9633 crore at March 31, 2026. Property, plant and equipment increased by Rs 20.76 lakh to Rs 137.8168 crore, while capital work in progress decreased by Rs 9.12 lakh to Rs 3.2928 crore.

The reported investing outflow was therefore not solely a reflection of additions to property, plant and equipment. The Rs 4.4451 crore fixed-deposit investment was marginally larger than the Rs 4.2613 crore capital-asset purchase line, making both items material components of the Rs 8.1398 crore outflow.

How was Steelco Gujarat's rights issue applied?

Steelco Gujarat allotted 13,30,060 fully paid-up equity shares during the half year ended September 30, 2026 at an issue price of Rs 112 each, comprising a face value of Rs 10 and premium of Rs 102 per share. The notes disclose aggregate rights-issue proceeds of Rs 14.8966 crore.

The shares were issued in the ratio of five rights equity shares for every one fully paid-up equity share held on the May 15, 2026 record date. The board approved the allotment on June 6, 2026, and the shares were listed on the stock exchange on June 8, 2026.

The company said the full Rs 14.8966 crore had been utilised by September 30, 2026. It disclosed Rs 11.5966 crore for long-term working-capital requirements, Rs 3 crore for general corporate purposes and Rs 30 lakh for issue-related expenses.

The cash-flow statement's Rs 14.5810 crore equity-proceeds figure is Rs 31.56 lakh below the Rs 14.8966 crore proceeds and utilisation total in the notes. After Rs 5.64 lakh of lease-liability repayment, the financing section reports a Rs 14.5246 crore net inflow and shows no proceeds from, or repayment of, long-term or short-term borrowings during the half year.

What changed in Steelco Gujarat's balance sheet?

Steelco Gujarat's total assets increased by Rs 12.1759 crore to Rs 259.8685 crore at September 30, 2026 from Rs 247.6926 crore at March 31, 2026. Current assets rose by Rs 6.1805 crore to Rs 100.9098 crore, despite the decline in cash, as higher receivables and other current assets outweighed the inventory reduction.

Other current assets increased by Rs 7.3423 crore to Rs 25.0118 crore, while cash and cash equivalents declined by Rs 8.4527 crore. The comparison shows that the period-end current-asset increase did not translate into a higher cash balance because major current-asset categories moved differently.

Total equity moved to a deficit of Rs 12.3886 crore at September 30 from positive equity of Rs 2.7172 crore at March 31. Equity share capital rose by Rs 1.3301 crore to Rs 6.2961 crore following the rights issue, while other equity was negative Rs 18.6847 crore compared with negative Rs 2.2488 crore at the prior year-end.

Long-term borrowings were unchanged at Rs 226.8046 crore at both September 30 and March 31, 2026. Non-current other financial liabilities increased by Rs 11.8875 crore to Rs 17.3215 crore, while total current liabilities rose by Rs 14.7903 crore to Rs 27.3725 crore.

Conclusion

Steelco Gujarat's September 2026 cash position reflects operating and investing outflows that absorbed the financing benefit of the rights issue. The Rs 14.5810 crore cash-flow equity inflow was smaller than the combined Rs 22.9773 crore operating and investing outflow, with the rise in receivables a principal disclosed working-capital use.

The next reporting period will show whether the Rs 11.5966 crore allocated to long-term working-capital requirements changes the trajectory of receivables, inventories and operating cash flow after September 30, 2026. The filing also leaves a Rs 31.56 lakh difference between rights-issue proceeds stated in the notes and equity proceeds in the cash-flow statement for readers to monitor for any company clarification.