Gaja Capital IPO: Negative cash flow, audit trail gap, promoter’s RBI default listing among key risks
Mumbai, Aug 19 (IANS) As Gaja Capital’s IPO opened for retail subscription, its Red Herring Prospectus (RHP) highlighted several risk factors that investors may need to weigh carefully, including persistent negative cash flow from operations, heavy reliance on carried interest, a temporary gap in its accounting software’s audit trail and the inclusion of promoter Gopal Jain’s name in an RBI default-related list
Gaja Capital said its cash flows from operating activities have remained negative in recent years. Net cash flow from operations stood at minus Rs 8.75 crore in FY25 and minus Rs 14.98 crore in FY26.
The company has also disclosed certain observations made by its auditors regarding its accounting records.
According to the auditors, Gaja Capital used accounting software for maintaining its books of account that had an audit trail or edit-log feature. While the feature was operational for the relevant transactions recorded during the year, it was not enabled between April 1, 2025 and August 27, 2025.
The auditors, however, said they did not identify any instance of tampering with the audit trail during their audit for the period when the feature was operational.
The company also stated that it has preserved the audit trail in accordance with the statutory requirements applicable from the date on which the feature was enabled.
An audit trail is an important internal control mechanism as it helps establish when changes were made to accounting records and provides details of alterations made to financial data.
Another risk highlighted in the RHP is the company’s dependence on carried interest, which can result in volatility in its overall income.
Carried interest accounted for 17.69 per cent of total income in FY24, rising sharply to 52.25 per cent in FY25 before standing at 47.79 per cent in FY26.
The company has also disclosed that the name of one of its promoters, Gopal Jain, appears in an RBI list relating to accounts with outstanding defaults of more than Rs 1 crore where no legal action had been initiated.
Gaja Capital said Jain’s name was included in the list because he had earlier served as a nominee director on the board of Educomp Infrastructure and School Management Ltd.
The company clarified that Jain was not associated with Educomp Infrastructure and School Management when the default occurred.
–IANS
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