Apollo Fashion International: Understanding the ₹95 Crore BTA and FY25 Financials

The Background

In September 2023, Apollo Fashion International Limited was incorporated. In June 2024, it acquired the fashion division from Apollo Green Energy Limited through a Business Transfer Agreement (BTA). The company manufactures footwear, leather garments, and accessories for fashion brands.

Let’s walk through what the annual report tells us.

Part 1: The Business Transfer Agreement

The Transaction Structure

On July 9, 2024, Apollo Fashion signed a Business Transfer Agreement with Apollo Green Energy Limited, with an effective date of June 1, 2024.

Assets Acquired:

• Property, plant and equipment: ₹23.54 crores
• Intangible assets under development: ₹6.31 crores
• Inventories: ₹52.33 crores
• Trade receivables: ₹49.19 crores
• Cash and bank balances: ₹1.30 crores
• Other assets: ₹6.93 crores
• Total assets: ₹139.6 crores (approximately)

Liabilities Assumed:

• Vehicle loans: ₹1.0 crores
• Employee benefit obligations: ₹1.47 crores
• Short-term borrowings: ₹28.76 crores
• Trade payables: ₹30.32 crores
• Other liabilities: ₹16.28 crores (approximately)
• Total liabilities: ₹76.96 crores

Net Assets Acquired: ₹62.66 crores

Consideration Paid:

• Cash: ₹61.50 crores
• Equity shares (1,11,67,200 shares at ₹30 each): ₹33.50 crores
• Total consideration: ₹95.00 crores

Capital Reserve: The difference between net assets (₹62.66 crores) and consideration paid (₹95.00 crores) resulted in a capital reserve of ₹32.34 crores (negative).

The Accounting Treatment

The annual report notes that this is a common control business combination under Ind AS 103. Therefore, all business transactions relating to the fashion division are included in Apollo Fashion’s financials from September 6, 2023 (incorporation date), even though the legal transfer happened on June 1, 2024.

However, for tax and other legal purposes, transactions from September 6, 2023 to June 1, 2024 remain in Apollo Green Energy’s books.

Part 2: Financial Performance

The Reporting Period Caveat

FY 2023-24 covers September 6, 2023 to March 31, 2024—only 7 months, not a full year. This makes year-on-year comparisons tricky.

For FY 2022-23, the annual report provides P&L data when the fashion division was still part of Apollo Green Energy.

Profit & Loss Statement

Note: FY23-24 EBITDA margin of 19.85% is based on 7-month actuals. The annualized equivalent would be different.

Key Financial Metrics

For FY 2024-25:

• Revenue grew from ₹89.98 Cr (7 months in FY24) to ₹182.44 Cr (full year in FY25)
• EBITDA increased from ₹17.86 Cr to ₹21.95 Cr
• Net profit increased from ₹12.15 Cr to ₹13.07 Cr

Part 3: Balance Sheet

Assets (as of March 31, 2025)

Equity & Liabilities (as of March 31, 2025)

Key Balance Sheet Observations

Working Capital Items:

• Trade receivables increased 115% from ₹21.71 Cr to ₹46.75 Cr
• Inventories decreased 8% from ₹52.55 Cr to ₹48.58 Cr
• Cash declined 99% from ₹5.08 Cr to ₹0.04 Cr
• Other bank balances increased to ₹12.00 Cr (primarily fixed deposits)

Debt:

• Current borrowings increased 327% from ₹14.90 Cr to ₹63.66 Cr
• Non-current borrowings increased from ₹0.06 Cr to ₹2.16 Cr
• Total debt: ₹65.82 Cr (96.7% is short-term)

Trade Payables:

• Total payables increased 192% from ₹8.20 Cr to ₹23.91 Cr

Liquidity Ratios:

• Current ratio: 1.30x (March 2025) vs. 1.06x (March 2024)
• Quick ratio: 0.78x (March 2025) vs. 0.42x (March 2024)

Part 4: Cash Flow Statement

Cash Flow Summary (FY 2024-25)

Where the Cash Went

Cash inflows:

• Operations generated ₹13.27 Cr
• Short-term borrowings increased by ₹47.78 Cr
• Equity raised ₹4.13 Cr

Cash outflows:

• Business transfer payment: ₹51.70 Cr
• Fixed deposits: ₹11.68 Cr
• Finance costs: ₹4.58 Cr
• Working capital absorption: ₹9.55 Cr

Result: Cash balance declined from ₹5.08 Cr to ₹0.04 Cr

Part 5: Related Party Transactions

Related Parties

The annual report identifies the following related parties:

Holding Company:

• RK Eternova Private Limited (formerly Amit Dyechem Private Limited)

Enterprises controlled/significantly influenced by Key Managerial Personnel:

• Apollo Green Energy Limited
• AIL Consultant Private Limited
• Global Propmart Private Limited
• OSK Holdings (AIL) Private Limited
• XTCY World Private Limited
• Vinayak Infosys Private Limited
• Adsal Exim Private Limited

Key Managerial Personnel:

• Mr. Raaja Kanwar (Chairman)
• Mr. Shiraz Askari (Wholetime Director)
• Others as listed in the report

Related Party Transactions (FY 2024-25)

Outstanding Balances (March 31, 2025)

What the Report Says About These Transactions

The annual report notes:

“As per the Business Transfer Agreement (BTA) with Apollo Green Energy Limited (AGEL), contracts with customers and suppliers are to be transferred to the Company. Until such transfer, AGEL has continued to record revenue and purchases with customers and vendors till the date of transfer on behalf of the Company. During this period, AGEL received payments from customers and made corresponding payments to vendors, and the Company has recognised back-to-back sales and purchases with AGEL to reflect the underlying economic substance. AGEL does not retain any profit margin on these transactions.”

The receivable from Apollo Green Energy: ₹17.76 crores represents amounts due from these back-to-back transactions.

Part 6: Debt Structure

Borrowing Details (March 31, 2025)

Non-Current Borrowings:

• Vehicle loans from banks and financial institutions: ₹3.14 Cr (gross)
• Less: Current maturity: ₹0.98 Cr
• Net non-current borrowings: ₹2.16 Cr

Current Borrowings:

• Cash credit from banks (RBL Bank, ICICI Bank): ₹49.18 Cr
• Packing credit (export finance): ₹12.57 Cr
• Factoring facility (Drip Capital): ₹0.93 Cr
• Current maturity of long-term borrowings: ₹0.98 Cr
• Total current borrowings: ₹63.66 Cr

Total Debt: ₹65.82 Cr

Security and Terms

RBL Bank Limited:

• Security: Hypothecation of current assets; second charge on properties owned by Apollo Green Energy Ltd and related entities; personal guarantee of Mr. Raaja Kanwar
• Interest rate: Repo rate + 5.00%

ICICI Bank Limited:

• Security: Charge on fixed deposits; first pari passu charge on movable fixed assets and current assets; corporate guarantee of Apollo Green Energy Ltd; personal guarantee of Mr. Raaja Kanwar
• Interest rate: Repo rate + 3.00%

Factoring Facility (Drip Capital):

• Export bill discounting facility
• Commission: 0.5% to 5% depending on tenor

Working Capital Limits: The company has sanctioned working capital limits of ₹65.00 crores from banks (ICICI Bank and RBL Bank).

Debt Ratios (March 31, 2025)

• Debt-to-Equity: 1.33x
• Gearing Ratio: 57%
• Net Debt to EBITDA: 2.95x
• Interest Coverage Ratio: 3.75x

Part 7: Share Capital Changes

Authorized Share Capital

Increases during FY24-25:

• May 15, 2024: Increased by ₹25.00 Cr (50 lakh shares)
• January 24, 2025: Increased by ₹28.00 Cr (2.80 crore shares)
• Total authorized capital: ₹53.00 Cr (5.30 crore shares of ₹10 each)

Issued Share Capital

Share issuances during FY24-25:

As of March 31, 2025:

• Paid-up capital: ₹29.77 Cr (2.98 crore shares of ₹10 each)

Shareholding Pattern (March 31, 2025)

Part 8: Other Disclosures

Contingent Liabilities

The annual report states there are no significant contingent liabilities as of March 31, 2025.

Capital Commitments

No material capital commitments are disclosed.

Auditor’s Report

The statutory auditors, S S Kothari Mehta & Co. LLP, issued an unqualified audit opinion. The report notes:

• They did not audit the financial information of Apollo Green Energy Limited (Fashion Division) for prior periods, which were audited by other auditors
• There are no defaults in repayment of loans or interest
• No amounts are required to be transferred to the Investor Education and Protection Fund

Director’s Report Highlights

• The company’s business operations commenced effectively from June 1, 2024
• No dividend was declared for the year
• Audit Committee and Nomination & Remuneration Committee were constituted on December 2, 2024
• The company is not required to appoint internal auditors, secretarial auditors, or cost auditors
• No complaints were reported under the Sexual Harassment Act
• Foreign exchange earnings: ₹67.17 Cr; Foreign exchange outgo: ₹11.33 Cr

Summary

Apollo Fashion International Limited's FY 2024-25 annual report documents a company in its first full year post-demerger, with revenue of ₹182.44 crores and net profit of ₹13.07 crores. The company acquired the fashion division from Apollo Green Energy Limited through a ₹95 crore Business Transfer Agreement (₹61.5 crore cash + ₹33.5 crore in shares) for net assets valued at ₹62.66 crores. The financials show total debt of ₹65.82 crores—96.7% of which is short-term—against equity of ₹49.57 crores, with cash declining from ₹5.08 crores to ₹0.04 crores during the year. Significantly, ₹83.37 crores (45.7% of revenue) came from sales to Apollo Green Energy, with ₹17.76 crores in receivables outstanding from the parent company as of March 31, 2025. The promoter group holds approximately 77% of the equity, with Apollo Green Energy owning 37.52%. Notably, while earlier share issuances during the year were priced at ₹10 per share (face value), the 1.12 crore shares issued to Apollo Green Energy as part of the BTA consideration were priced at ₹30 per share—a valuation basis that remains unexplained in the annual report. The annual report, audited by S S Kothari Mehta & Co. LLP with an unqualified opinion, presents the baseline financial position of a business navigating its transition from subsidiary operations to standalone entity while maintaining substantial commercial relationships with its former parent.