The pure-veg pizza chain that grew 17% and still ran out of cash

Here's a number to start with.

₹9,54,000.

That's the cash Cheelizza Pizza India Limited had in its bank accounts and cash drawers on 31 March 2026. Across 23 outlets. In four cities. For a company that had just sold ₹22.65 crore worth of pizza that year.

To put it plainly: the company had less cash on hand than the monthly revenue of a single store.

And that's the puzzle we want to unpack today. Because on the surface, FY26 looks like a decent year. Revenue climbed 17%, from ₹19.35 crore to ₹22.65 crore. The operating loss actually shrank — EBITDA improved from −₹3.04 crore to −₹1.65 crore. The company paid off its entire ₹1.55 crore debenture. It converted from a private limited to a public limited company. It brought two independent directors onto the board, including a former CFO who's done time at Tata Steel and AB InBev.

That's a company preparing for the big leagues, right?

Well. Let's look under the cheese.

Cheelizza's gross margin is fine. Raw material — flour, cheese, veggies, packaging — costs about 35% of revenue. Which means roughly 65 paise of every rupee survives the kitchen.

Then the bleeding starts.

Sales commission for the year: ₹3.98 crore. That's 17.6% of revenue walking out the door to delivery aggregators. Advertising and marketing: another ₹1.67 crore, or 7.4%. So a quarter of everything Cheelizza earns is spent on getting the order and then handing over a cut of it.

Add rent (₹1.95 crore), electricity (₹1.55 crore), and salaries (₹4.57 crore, a full 20% of revenue), and there's nothing left. The company loses money at the operating level before you even get to interest costs.

This isn't a Cheelizza-specific disease. It's the QSR business in India in 2026. When your customer discovers you on an app, orders on an app, and pays on an app, the app owns the relationship — and prices accordingly. Chains with scale can negotiate. A 23-store chain cannot.

A loss-making growth company is a normal thing. Every QSR chain burns cash on the way up. The question is always: whose cash, and for how long?

Here's what Cheelizza's own auditors disclosed.

One. The company incurred cash losses of ₹2.27 crore in FY26, on top of ₹4.08 crore the year before.

Two. The CARO annexure lists page after page of loan repayment delays — to Capwise Finance, Incred, Indifi, ICICI, and the debenture trustee. Not one-off slips. Month after month, all year, running 30 to 120 days late. April's EMI paid in July. May's paid in September. October's paid on New Year's Eve.

Three. TDS deducted from employee salaries between April and August 2025 was only deposited with the government on 13 May 2026 — roughly a year late. Employee State Insurance dues of ₹11.13 lakh and labour welfare fund dues of ₹28,689 were simply unpaid as of the audit date.

When a company starts paying its lenders late and its statutory dues later, it isn't making a strategic choice about capital allocation. It's managing a cash crisis, one week at a time.

Four. Who's actually funding the business? The promoter. Managing Director Animesh Lodha lent the company ₹7.27 crore during the year and took back ₹6.01 crore, leaving ₹2.47 crore outstanding. That's not venture capital. That's a founder's personal balance sheet acting as a working capital line.

Now for the balance sheet, which is where it gets genuinely uncomfortable.

Cheelizza's total equity on 31 March 2026 was negative ₹15 lakh. Accumulated losses of ₹16.21 crore have eaten through the share capital and securities premium.

Current liabilities stand at ₹6.14 crore against current assets of ₹2.50 crore. That's a current ratio of 0.41 — meaning for every rupee owed in the next twelve months, there are 41 paise available to pay it.

And ₹2.56 crore of the assets side is a deferred tax asset. That's an accounting entry representing future tax savings from past losses. It only converts into value if the company eventually makes taxable profit. Strip it out — as a conservative analyst would — and net worth drops to roughly negative ₹2.7 crore.

The company did raise ₹5.25 crore through a rights issue in December 2025, at ₹12 a share. Useful money. But it went straight into plugging holes, not into new stores.

This is the most revealing part of the whole report, and it sits in a statement most people skip.

Start with the loss before tax: −₹3.31 crore. Add back depreciation of ₹0.99 crore, which is an accounting entry and not cash leaving the building. Add back finance cost of ₹0.67 crore, which gets shown separately. What you're left with is the real cash burn from running pizza stores: −₹1.60 crore.

That's manageable. That's a company that's close.

But the reported operating cash flow for FY26 is −₹5.42 crore. So where did the other ₹3.8 crore go?

It went into paying people back.

Short-term borrowings fell by ₹2.84 crore during the year — from ₹5.79 crore down to ₹2.95 crore. Other current liabilities fell by another ₹1.25 crore, including statutory dues that dropped from ₹1.33 crore to ₹0.91 crore. In plain English: Cheelizza spent FY26 clearing expensive short-term debt and catching up on bills it had been sitting on.

That's the right thing to do. It just isn't free.

Then add investing. ₹0.93 crore went into equipment and fit-outs. Another ₹0.60 crore went into a fixed deposit — except this isn't savings. The notes tell you it's 30% of the ICICI working capital facility, sitting under a lien in the bank's favour. It's collateral. That cash is locked and unusable.

Total hole for the year: roughly ₹6.95 crore.

And here's how it got filled:

Look at that second line carefully. The ₹2.43 crore of "long-term borrowings" didn't come from a bank. Secured loans actually went to zero during the year. Flip to Note 5 and you'll find a line item that was ₹0 last year and ₹2.47 crore this year: Loans from directors.

The promoter lent ₹7.27 crore over the course of the year and took back ₹6.01 crore. That's not a term loan with a repayment schedule. That's a founder's personal bank account being used as an overdraft facility, topped up and drawn down as the business needs it.

So the honest answer to "how did Cheelizza fund FY26?" is this: it raised ₹7.7 crore from shareholders and its own promoter, and spent it on ₹1.6 crore of operating losses, ₹2.8 crore of debt repayment, ₹1.25 crore of overdue liabilities, ₹0.93 crore of capex, ₹0.67 crore of interest, and ₹0.6 crore locked up as collateral.

What was left at the end of it all? ₹9.54 lakh.

The rights issue money didn't open new stores. It paid off old debt. Which may explain why the AGM polling paper carries an item titled "Utilization of Funds in Rights Issue Proceeds" — a resolution that, oddly, doesn't appear anywhere in the notice itself.

Cheelizza's shares trade in India's unlisted market, where they've been quoted around ₹12–13 recently, against a 52-week high near ₹78. That's a brutal repricing.

Even at ₹12, the market is valuing the company at roughly ₹135 crore — about six times revenue for a business with negative equity and negative EBITDA. Listed QSR players who actually make money at the store level trade at a fraction of that multiple.

Meanwhile, the company is raising fresh capital through Compulsorily Convertible Preference Shares issued at ₹10,000 each. And here's the detail worth pausing on: only ₹100 per share has actually been received. The remaining ₹9,900 is payable "in one or more subsequent calls." As of 31 March 2026, the total money in from that instrument was ₹1.82 lakh.

Then there's the governance housekeeping. The audit committee, nomination and remuneration committee, and the mandatory POSH internal complaints committee did not exist as of 31 March 2026 — all were constituted only after year-end. The statutory auditor resigned mid-term citing "pre-occupancy." And in a small but telling slip, the AGM's polling paper and proxy form both list a sixth resolution — approving how the rights issue money was spent — that doesn't appear anywhere in the actual notice.

Cheelizza has a real thesis. A 100% pure-veg QSR chain is a genuine gap in a country where a huge slice of the population won't eat in a shared kitchen. The brand exists, the stores exist, customers are buying. Revenue per outlet works out to around ₹98 lakh a year, which isn't embarrassing.

But a good idea and a solvent balance sheet are different things. Cheelizza is currently proving one and struggling badly with the other.

The company needs to do three things to survive the next eighteen months: get store-level economics to positive cash, raise real equity rather than promoter loans, and reduce its dependence on aggregators that take a fifth of every order.

Whether it can do all three before the cash runs out is the only question that matters.

Until next time.

This piece is based entirely on Cheelizza Pizza India Limited's FY 2025–26 annual report, audited by APRA & Associates LLP, and publicly available unlisted market quotes. It is not investment advice. Unlisted shares are illiquid, lightly regulated, and can be difficult to exit