Vivekanand Cotspin Limited cut long-term debt, raised short-term debt

Vivekanand Cotspin Limited cut long-term borrowings by Rs 16.9025 crore to Rs 12.5869 crore at March 31, 2026, while short-term borrowings rose Rs 7.1386 crore to Rs 32.4083 crore. The restated accounts show a funding-mix shift led by director-loan repayments and higher bank cash credit, rather than an across-the-board withdrawal from borrowings.

How did Vivekanand Cotspin’s debt mix change in FY26?

Vivekanand Cotspin reduced combined reported long-term and short-term borrowings by Rs 9.7639 crore during the year ended March 31, 2026. The combined balance fell to Rs 44.9952 crore from Rs 54.7591 crore at March 31, 2025, but the reduction was concentrated in non-current, or long-term, borrowings.

Long-term borrowings declined from Rs 29.4894 crore at March 31, 2025 to Rs 12.5869 crore at March 31, 2026. Short-term borrowings moved in the opposite direction, increasing from Rs 25.2697 crore to Rs 32.4083 crore. The company classifies liabilities as current or non-current using a 12-month operating cycle, so the short-term balance represents obligations expected to be settled within that cycle.

Short-term borrowings therefore accounted for about 72% of combined reported borrowings at March 31, 2026, compared with about 46% at March 31, 2025. This comparison excludes trade payables, provisions and other current liabilities because the restated balance sheet classifies those items separately from borrowings.

What caused Vivekanand Cotspin’s long-term debt reduction?

Vivekanand Cotspin’s largest identified long-term borrowing reduction was in unsecured loans from directors. Director borrowings fell by Rs 12 crore, from Rs 18.6171 crore at March 31, 2025 to Rs 6.6171 crore at March 31, 2026, accounting for most of the Rs 16.9025 crore fall in total long-term borrowings.

The remaining director-loan balance was concentrated among five named lenders at March 31, 2026. Jasin Vishnubhai Patel had Rs 2.3989 crore outstanding, about 36% of the Rs 6.6171 crore total, while Bharathbai Patel, Gautam Bharathbai Patel, Nirav Patel and Vishnubhai Patel held the remainder. Nirav Patel’s balance declined from Rs 7.1943 crore at March 31, 2025 to Rs 1.4463 crore a year later.

Secured long-term borrowing, after current maturities, also decreased from Rs 10.8723 crore at March 31, 2025 to Rs 5.9698 crore at March 31, 2026. The restated cash-flow statement records Rs 16.9025 crore of net repayment of long-term borrowings in FY26, compared with Rs 9.9163 crore of net proceeds from long-term borrowings in FY25.

The March 2026 secured term-loan disclosure includes a Bank of Baroda loan with Rs 8.539 crore outstanding, a 60-month repayment period and an 8.15% interest rate for a 4 megawatt peak solar photovoltaic ground-mounted power plant. It also lists a Rs 2.3333 crore Bank of Baroda term loan with a 36-month period and a 9.25% interest rate. Rs 4.9025 crore of current maturities of secured long-term debt was reported within short-term borrowings.

Why did Vivekanand Cotspin’s short-term borrowings rise?

Vivekanand Cotspin’s increase in short-term borrowings came from secured bank cash credit, while current maturities of secured long-term debt were nearly unchanged. Cash credit increased by Rs 7.1386 crore to Rs 27.5058 crore at March 31, 2026, and current maturities were Rs 4.9025 crore, compared with Rs 4.9025 crore a year earlier.

The company reported no short-term unsecured borrowings from directors, partners or other parties at either March 31, 2025 or March 31, 2026. Bank of Baroda had a cash-credit balance of Rs 24.0359 crore at March 31, 2026, while State Bank of India reported Rs 3.4685 crore of cash credit and Rs 0.13 lakh of export packing credit. Bank of Baroda’s facility carried an 8.40% rate and State Bank of India’s facilities carried an 8.90% rate; all were repayable on demand.

The higher cash-credit balance coincided with additional funds tied up in working capital. Inventories rose by Rs 6.511 crore to Rs 24.4057 crore and trade receivables increased by Rs 1.9457 crore to Rs 17.1673 crore during FY26. Trade payables, by contrast, declined by Rs 4.2843 crore to Rs 1.8719 crore, reducing supplier-credit funding recorded at the March 2026 balance-sheet date.

What do Vivekanand Cotspin’s cash flows show about the funding shift?

Vivekanand Cotspin reported net cash from operating activities of Rs 8.6664 crore in FY26, following net operating cash outflow of Rs 10.7876 crore in FY25. The FY26 operating result followed a Rs 6.511 crore increase in inventories and a Rs 4.8993 crore decrease in trade payables and other liabilities, both recorded as working-capital movements in the restated cash-flow statement.

Financing activities used Rs 6.732 crore in FY26, compared with a Rs 11.1373 crore inflow in FY25. The FY26 cash-flow statement separately records Rs 16.9025 crore of net repayment of long-term borrowings, Rs 8 crore of proceeds from short-term capital borrowings, Rs 7.1386 crore of proceeds from short-term borrowings and Rs 5.5861 crore of interest paid. These disclosed flows show that long-term debt repayment occurred alongside short-term funding activity.

Cash and cash equivalents in the March 2026 balance sheet were Rs 27.95 lakh, compared with Rs 23.16 lakh at March 31, 2025. The cash-flow statement reports a March 2026 closing cash balance of Rs 29.75 lakh, so the supplied restated statements show different closing cash figures; the borrowing comparison uses the balance-sheet borrowing amounts.

What supports and constrains Vivekanand Cotspin’s short-term funding?

Vivekanand Cotspin’s bank working-capital facilities are secured by operating assets. The cash-credit disclosure states that lenders hold an exclusive first charge by hypothecation, or a charge over movable assets, on raw materials, stock in process, stores and spares, packing material, finished goods and book debts, both present and future. These assets included Rs 24.4057 crore of inventory and Rs 17.1673 crore of trade receivables at March 31, 2026.

State Bank of India’s disclosure also lists a Rs 3 crore lien on deposits and personal guarantees from directors and promoters as collateral support. The continued use of demand facilities depends on lender availability and the secured working-capital pool, while finance costs rose from Rs 2.6091 crore in FY25 to Rs 5.5681 crore in FY26. The March 2026 Bank of Baroda cash-credit sanction amount was Rs 36 crore, against Rs 24.0359 crore outstanding.

Conclusion

Vivekanand Cotspin reduced combined reported borrowings by Rs 9.7639 crore in FY26, but the decline was not uniform across maturities. Repayment of Rs 12 crore of director loans and lower secured long-term balances drove the Rs 16.9025 crore fall in long-term debt, while bank cash credit increased by Rs 7.1386 crore as inventories and receivables rose.

The next financial update should clarify whether cash-credit usage declines as the company’s 12-month operating cycle converts inventory and receivables into cash. The disclosed Bank of Baroda term loans have 60-month and 36-month repayment periods, while cash-credit facilities are repayable on demand, making maturity classification and continued facility access the disclosed matters to watch.