Shree Rama Newsprint FY26: A ₹33 Cr Revenue Line Carrying ₹376 Cr of Borrowings

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1 — At a Glance

Shree Rama Newsprint closed FY26 with sales of ₹32.72 crore and a net loss of ₹68.54 crore — a company whose annual loss runs more than twice its annual revenue. The paper division that gave the company its name was discontinued back in FY23; what remains operating is a packaged drinking-water bottling plant. The balance sheet now carries reserves of negative ₹230.15 crore against ₹147.52 crore of equity capital, leaving net worth at negative ₹82.63 crore.

The auditors flagged a material uncertainty over the company’s ability to continue as a going concern, noting current liabilities exceeded current assets by ₹121.53 crore. Borrowings stood at ₹376.27 crore at year-end. Against all of this, the market still assigns the company a size of ₹429 crore.

The attention signal: a ₹350 crore block of preference shares issued to the parent sits inside that debt figure. The worry signal: operating cash flow turned negative at ₹1.09 crore in FY26, the first negative reading in four years. When a revenue line shrinks to a fraction of the interest bill it services, the income statement stops being the main event and the balance sheet takes over. Whether the asset-disposal plan can close a ₹121 crore current-liability gap is the question the whole entry circles back to.

2 — Introduction

Shree Rama Newsprint was incorporated in 1993 and, per the rating record, was promoted initially by Mr Vashu Ram Singhani. West Coast Paper Mills acquired majority control in 2003; during FY16, Riddhi Siddhi Gluco Biols Limited (RSGBL) bought the majority stake from West Coast and its promoters. The company today is part of the Riddhi Siddhi group, with RSGBL holding 74.76% as of March 2026.

The original business was recycled-paper-based writing and printing paper and newsprint, made from waste paper. That changed. The paper division was shut permanently — operations closed in December 2021, workforce retrenched from December 2022 — and was classified as a discontinued operation in FY23, with shareholder approval obtained to dispose of all its assets. The plant and machinery are being sold piecemeal; a June 2025 announcement recorded disposal of paper-division equipment for ₹5.91 crore.

What continues is a packaged drinking-water bottling plant under the “Clear” brand, commissioned July 2019, with installed capacity of 2,534.4 lakh bottles a year. Per CARE’s report, 200 ml bottles formed 57% of volume in the period it reviewed. The company also holds a captive coal-based power plant of 23 MW.

The FY26 year brought a board-meeting outcome on 25 May 2026: audited results approved, going-concern uncertainty noted, and Mr Alok Jain appointed as an independent director for a five-year term. Earlier in the year, Mr Kanhaiyalal Chandak ceased as independent director on 8 February 2026 after completing his final tenure.

3 — Business Model: WTF Do They Even Do?

Here is a company named “Newsprint” that no longer makes newsprint. The brand promise is in the title; the actual product is bottled water. It is the corporate equivalent of a restaurant called “The Steakhouse” that now sells only lemonade — and the lemonade stand is the part keeping the lights on.

The continuing business is co-packing water bottles for the “Clear” brand: 200 ml, 500 ml, 1 litre and 2 litre formats, run off a single plant commissioned in 2019. Per CARE, the bottling line ran a healthy PBILDT margin of 27.28% during 9MFY26 on the continuing operations alone. So the operating water business itself is not the problem — it’s small, but it earns a margin. FY26 sales of ₹32.72 crore came almost entirely from this single segment; the company itself notes the water-bottle division is now its only operating segment, so segment reporting no longer applies.

The defunct paper side still haunts the statements. Its assets sit as “held for sale,” and FY26 swallowed a further impairment loss of ₹27.84 crore as the company reassessed their realisable value per a valuer’s report. The original paper capacity was substantial — two paper machines rated at 1.5 lakh MTPA and two de-inking plants — all now idle inventory awaiting buyers across a geographically dispersed site, which the auditors note is exactly why disposal keeps taking longer than planned.

The structural oddity: a profitable little bottling operation is bolted onto a financing structure built for a large paper mill that no longer runs. The water plant earns a margin; the legacy capital structure consumes it whole.

Does a 27% margin on ₹33 crore of revenue ever cover the interest on debt scaled to a business ten times larger?

4 — Financials Overview

Figures are consolidated, in ₹ crore.

Revenue in the March quarter fell to ₹7.87 crore from ₹11.33 crore a year earlier and ₹8.84 crore in the prior quarter. The quarterly net loss widened sharply to ₹37.91 crore. Per the filing,