Grand Foundry Limited — financial distress indicators
Financial-health summary
Grand Foundry Limited's reported numbers place it in the 'Watch' financial-health band (distress score 41/100). The main indicators are liabilities exceed assets (negative equity), ohlson o-score signals likely failure and losses in 2 of the last 3 years. Independently, the Ohlson accounting model puts its 1-year failure probability at 100% and the market-implied (Merton) default probability is 0.0%. In its favour: comfortable interest coverage (5.1×).
Stress by dimension
Share price — last 12 months
Indicators behind the score
Each red flag shows the evidence from the company’s own filings and the financial or legal principle behind it. Points add to the 0–100 score.
Total liabilities are 1.41× total assets.
Balance-sheet insolvency test: debts exceeding the fair value of assets is the statutory definition of net-worth erosion; under the Companies Act 2013 it is a recognised sign of financial sickness.
O-score 5.43 → model probability 100%.
Ohlson (1980) logit model of 1-year corporate failure; O > 0 (p > 50%) is the original failure cut-off.
Recurring net losses.
Repeated losses are a core input in both Ohlson and Altman failure models.
Operating cash flow negative in 3 of the last 3 years. The company is profitable, so this likely reflects working-capital or loan-book growth.
A business that cannot fund itself from operations depends on external capital to survive.
Revenue vs net income
Cash generation
Debt vs cash vs equity
✅ Mitigating factors
- Comfortable interest coverage (5.1×).
- High insider/promoter ownership (70%) aligns management with survival.
📰 Recent news scan
- Grand Foundry Ltd. (GFSTEELS) 52 Week High Streak: Second Straight Session Near One-Year Peak - UnivestGoogle News · 2026-10-06
- GF Steels (NSE:GFSTEELS): What Does the Promoter Reclassification Mean After the Open Offer? - Kalkine IndiaGoogle News · 2026-09-29
- Tikona Communication (NSEI:GFSTEELS) - Stock Analysis - Simply Wall StreetGoogle News · 2026-09-15
- Grand Foundry Chart Analysis and Earnings Outlook - Kalkine IndiaGoogle News · 2026-09-08
⚖️ Indian legal pathway — the IBC, 2016
How insolvency starts
- A financial creditor (§7), an operational creditor after a demand notice (§§8–9) or the company itself (§10) can apply to the NCLT once a default of at least ₹1 crore occurs (§4).
- On admission a moratorium (§14) stops suits and recovery; the board is suspended and an insolvency professional runs the company.
- The Committee of Creditors approves a resolution plan with 66% of voting share (§30(4)) within an outer limit of 330 days (§12); otherwise liquidation (§33) under the §53 waterfall — equity ranks last. Defaulting promoters are generally barred from bidding (§29A).
Earlier warning stages
- RBI's Prudential Framework for Resolution of Stressed Assets (7 June 2019): lenders must review a borrower within 30 days of default and implement a resolution plan, or provide more.
- Listed companies must disclose loan defaults to exchanges under SEBI (LODR); a rating downgrade to “D” is a public signal.
- Auditors must report going-concern uncertainty (SA 570 / Ind AS 1).
Frequently asked questions
What do Grand Foundry Limited's financial-health indicators show?
As of 2026-10-09, Grand Foundry Limited's public financial data places it in the 'Watch' band with a distress score of 41/100, driven by liabilities exceed assets (negative equity), ohlson o-score signals likely failure and losses in 2 of the last 3 years. This is a statistical screen of reported numbers — it does not mean the company is insolvent, has defaulted or will enter insolvency proceedings.
What is Grand Foundry Limited's financial distress score?
41/100 ('Watch'). Ohlson O-score 5.43 (model 1-year failure probability 100%). Merton distance-to-default 17.7 σ (model default probability 0.0%).
What works in Grand Foundry Limited's favour?
Comfortable interest coverage (5.1×). High insider/promoter ownership (70%) aligns management with survival.
How are shareholders treated if a company enters insolvency?
Under the IBC the Committee of Creditors controls the resolution; the §53 waterfall pays secured creditors and workers first and equity last. In most resolution plans existing shareholders are wiped out or left with a token stake, and the company may be delisted.
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Methodology
Score = capped sum of rule-based red flags across seven dimensions (liquidity, solvency, profitability, cash flow, sales trend, market signal, news). Ohlson O-score (1980) gives an accounting-based 1-year failure probability; Merton distance-to-default (Bharath & Shumway 2008) gives a market-implied probability. Financial institutions use a capital-based rule set. Recalculated every trading day from the latest filings, prices and news.