Tirupati Forge books Rs 1.2 crore deposit-loss provision

Tirupati Forge Limited recorded a Rs 1.2 crore expected credit loss provision at September 30, 2026 for fixed deposits from its April 2019 preferential issue, overdue since November 2020. The auditor said Ashish Credit Co-operative Society Ltd defaulted on the maturity payment on account of fraud, while recovery action remains under way.

What happened to Tirupati Forge's 2019 fundraise balance?

Tirupati Forge raised Rs 5.346 crore through a preferential issue of convertible warrants on April 8, 2019. The stated objects were long-term and short-term working-capital requirements and support for future business-expansion plans. Its statement for the quarter ended September 30, 2026 records Rs 4.146 crore as utilised, leaving Rs 1.2 crore unutilised.

The company’s note says the unutilised Rs 1.2 crore was deposited in fixed deposits of a Credit housing Co-operative society. The auditor’s comment identifies Ashish Credit Co-operative Society Ltd as the entity holding the deposits. The November 5, 2026 filing does not explain whether the two names refer to the same cooperative society, but both disclosures concern the Rs 1.2 crore balance from the April 2019 issue.

The utilisation statement marks “No Deviation” for the April 2019 issue. The filing defines deviation or variation as a change in the fundraising objects, the amount actually utilised against the original disclosure, or the terms of a fundraising contract. Its disclosed original allocation of Rs 5.346 crore and reported utilisation of Rs 4.146 crore remained unchanged in the September 30, 2026 statement.

Why did Tirupati Forge provide Rs 1.2 crore for expected losses?

Tirupati Forge provided Rs 1.2 crore for expected credit losses, or ECL, as at September 30, 2026 because the fixed deposits had been overdue for maturity since November 2020. The auditor said the society defaulted on repayment of the maturity amount on account of fraud. The provision matches the Rs 1.2 crore described as unutilised and deposited in fixed deposits in the utilisation note.

The filing says the ECL provision was estimated by management after considering probable recovery. It does not disclose a separate expected recovery amount, a recovery deadline, the contractual deposit interest rate or a revised deposit-maturity date. The disclosed record therefore shows an accounting provision at September 30, 2026 rather than a reported cash recovery from the deposits overdue since November 2020.

The sequence spans more than six years from the April 8, 2019 fundraise to the September 30, 2026 reporting date. Within that period, the deposits became overdue in November 2020 and were subsequently subject to the Rs 1.2 crore ECL provision. The company’s filing does not state that any portion of the deposit had been repaid by November 5, 2026.

What recovery action has Tirupati Forge disclosed?

Tirupati Forge said management had taken steps to recover the overdue deposits and was continuing the recovery process as of the September 30, 2026 report. Its audit committee said it agreed with the auditor’s observation on the overdue fixed deposits held with Ashish Credit Co-operative Society Ltd. The committee’s comment was included in the deviation and variation statement filed on November 5, 2026.

The auditor said Tirupati Forge had lodged a first information report, or FIR, and a suit relating to the alleged fraud and repayment default. The disclosed case numbers are CC/1349/2021 to CC/1352/2021. The filing does not provide a court order, a hearing date, an amount recovered through the proceedings, a settlement proposal or the current procedural status of those cases.

The auditor attributes the repayment default to fraud, but the filing does not name any individual accused of fraud or identify findings by a court or investigating authority. The disclosed facts establish that Tirupati Forge initiated an FIR and suit covering case numbers CC/1349/2021 to CC/1352/2021. They do not establish the final liability of the cooperative society or any other party.

How does the 2019 balance compare with newer fundraising disclosures?

Tirupati Forge’s unresolved deposit relates to the April 8, 2019 raise, rather than its January 3, 2025 preferential issue. The January 2025 issue raised Rs 37.632 crore for capacity expansion, asset acquisition, plant and machinery, working capital and general corporate purposes. The September 30, 2026 statement reported Rs 37.5423533 crore utilised and Rs 8.96 lakh unutilised with Indian Overseas Bank.

The company also reported a preferential issue dated August 31, 2026 that raised Rs 5.365 crore. For that issue, the September 30, 2026 statement says Rs 5.36 crore was unutilised and lying with Indian Overseas Bank. Unlike the April 2019 disclosure, the August 2026 statement contains no audit-committee or auditor comment about an overdue fixed deposit or an ECL provision.

The disclosed custody arrangements therefore differ across the three fundraising statements. The April 2019 unutilised balance of Rs 1.2 crore was placed in cooperative-society fixed deposits and became overdue, while the January 2025 unutilised amount of Rs 8.96 lakh and the August 2026 unutilised amount of Rs 5.36 crore were stated to be with Indian Overseas Bank. All three statements record no deviation or variation.

Did Tirupati Forge report other loan defaults?

Tirupati Forge reported zero outstanding loans or revolving facilities from banks and financial institutions in its debt-default disclosure dated November 5, 2026. It also reported zero default on those facilities. The same disclosure lists zero outstanding unlisted debt securities, including non-convertible debentures and non-convertible redeemable preference shares.

The zero borrowing-default disclosure is separate from the Rs 1.2 crore recovery matter. It covers loans, revolving facilities and unlisted debt securities of Tirupati Forge, whereas the ECL provision concerns fixed deposits made from unutilised April 2019 preferential-issue proceeds. The filing reports both matters for the quarter ended September 30, 2026.

Conclusion

Tirupati Forge’s September 30, 2026 disclosure shows that Rs 1.2 crore from its Rs 5.346 crore April 2019 preferential issue remained tied to fixed deposits overdue since November 2020. The company has made an ECL provision for Rs 1.2 crore, while its auditor says the deposit holder defaulted on maturity repayment on account of fraud and the company has begun recovery proceedings.

The next disclosed development to watch is any update on recovery action under case numbers CC/1349/2021 to CC/1352/2021, including any change in management’s estimate of probable recovery. Tirupati Forge also has Rs 5.36 crore from its August 31, 2026 issue and Rs 8.96 lakh from its January 3, 2025 issue recorded as unutilised with Indian Overseas Bank as of September 30, 2026.