Synopsis: Airfloa Rail Technology stock tumbled 11% to Rs. 346 after IPO fund misuse reports. The company denied any misuse. H1 FY26 revenue fell 15% versus H2 FY25, with negative operating cash flow, weaker margins, and profit-taking post-IPO adding to the sharp selloff.
This company is known for its railway technology solutions. The news highlights a sharp 11% stock decline following reports of IPO fund misuse. The article also covers the company’s revenue drop of 15% in H1 FY26 compared to H2 FY25, a significant negative operating cash flow, and profit-taking after an initial post-IPO rally.
Airfloa Rail Technology Limited’s stock, with a market capitalisation of Rs. 865 crores, fell to Rs. 346, hitting a low of up to 11.2 percent from its previous closing price of Rs. 389.70. Furthermore, the stock since IPO has given a return of 22.8 percent.
What Happend?
The company’s H1 FY26 performance showed weaker results compared to H2 FY25, with revenue falling by about 15%. Operating cash flow turned sharply negative at Rs. 41 crore, compared to Rs. 16 crore negative in the previous half year. While deviations in IPO fund use has been viewed as negatively.
Company Statement
Investors in Airfloa Rail Technology Limited should not be overly concerned based on the latest regulatory filing for the half year ended September 30, 2025. The company has reported no deviations or variations in the utilization of IPO proceeds, confirming that funds raised (around Rs. 91.09 Crore) have been utilized as per the objects disclosed in the offer document. There are no delays in project implementation, no material unfavorable events impacting viability, and no concerns regarding government approvals or shareholder agreements. Additionally, the utilization for working capital, repayment of loans, capex, and other purposes is on track with no outstanding issues reported by the audit committee or board.
Furthermore, the company’s financial management appears prudent, with a significant portion of unutilized IPO funds safely kept in monitoring accounts, and no signs of financial distress or mismanagement have been disclosed. The issue expenses are minimal and accounted for, and the company has been transparent in its disclosures.
H1 FY26 Financial Highlights
Revenue in H1FY26 stood at Rs. 90.5 crore, down 15.6% year-on-year from Rs. 107.2 crore in H1FY25 but up 6.4% sequentially from Rs. 85.1 crore in H2FY25. The decline on a YoY basis indicates softer demand or pricing pressure, though the QoQ improvement suggests a recovery trend in sales momentum during the first half of FY26.
Profit for H1FY26 rose sharply to Rs. 12.1 crore, marking a 24.2% YoY growth from Rs. 9.7 crore but falling 26% QoQ against Rs. 16.4 crore in H2FY25. Despite lower revenue YoY, the higher profitability reflects improved margins or cost efficiency. Cash flow from operations remained negative at Rs. -40.1 crore in H1FY26 compared with Rs. -16.9 crore in H2FY25, indicating higher outflows or working capital strain.
Written By Fazal Ul Vahab C H
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