Eco Solution Ltd. (ESL), headquartered in Bengaluru, operates in the manufacturing and export of energy-efficient electrical components. Founded in…

Eco Solution Ltd. (ESL), headquartered in Bengaluru, operates in the manufacturing and export of energy-efficient electrical components. Founded in August 2010, ESL was born out of a strategic collaboration between Jaynam and Ritik, who first crossed paths during an international sustainability summit hosted by the Confederation of Indian Industry (CII). Their discussions led to a shared realization: India's energy infrastructure required not just innovation, but a commercially viable green-tech backbone. This meeting of minds became the catalyst for the formation of ESL. The company's vision is to “enable a greener tomorrow through responsible innovation,” and its mission is to “design and deliver energy solutions that enhance efficiency, reduce carbon dependency, and empower industry transitions to clean power.” With a technology-driven business model grounded in engineering and automation, ESL strategically aligned itself with Government of India's growing thrust on green energy. The firm began developing smart grid components and hybrid energy storage solutions-areas identified as critical to reducing the environmental footprint of conventional coal-based power generation. ESL's product portfolio offers scalable support to firms migrating to renewable power, enabling reliable and cost-effective long-term energy storage. However, the company's business cycle remains relatively long. The time period between the purchase of raw materials and completion of final product to make the buyers ready for power storage would take 12 months for ESL. Customers purchased them immediately once they were ready for installation but the payment was made with a credit period of 6 months. The company took a long-term loan from Dena Ltd. for managing capital expenditure pertaining to new project. However, the installments due in the financial year 2024-2025 could not be paid on time and as a consequence the loan became repayable on demand on 31st day of March 2025. In June 2025, ESL engaged in renegotiations with Dena Ltd. Following a review of ESL's growth potential and consistent managerial commitment- well documented and appreciated across industry platforms and media (refer ANNEXURE I) - the lender agreed not to invoke the repayment-on-demand clause. It was decided between the borrower and the lender before approval of audited financial statements of ESL, such that the lender Dena Ltd. will not demand repayment of loan in spite of the breach of repayment terms by ESL. Faced with short-term liquidity challenges, the management at ESL began evaluating strategic funding options that would align with their long-term growth vision. After internal deliberations and consulting with financial advisors, they opted to raise capital through External Commercial borrowing (INR denominated) by issuing Non-Convertible Debentures with maturity period of 7 years. The foreign investors who will be subscribing to the said debentures requested for interim financial report (to be prepared as per IND AS). ESL's Chief Financial Officer (CFO) was tasked with overseeing the preparation of this report and coordinating its internal review before submission. Upon reviewing the interim financial report, Merbin, a senior member of the corporate accounting team, identified several discrepancies in its treatment and disclosures, which he believes are not in compliance with the guidelines prescribed under IND AS. Specifically, he noted that: (i) One item of extraordinary nature has not been shown (II) Reversal of impairment loss recognized in a previous interim period in respect of goodwill (III) disclosure of only basic earnings per share has been made. (IV) Insignificant changes in contingent liabilities has not been disclosed. Despite these Issues, ESL submitted the same interim financial report to investors and proceeded with the issuance of External Commercial Borrowings (ECB). Proceeds from issue (INR 8 Crores) will be used for repayment of outstanding balance of Loan of Dena Ltd. (INR 5 Crores and working capital purposes INR 3 Crores). ESL however did not hedge the exposure of ECBs (principal as well as the coupon) and used the exchange rate prevailing on the date of settlement (01.06.2025) for conversion to rupee as against the exchange rate on the date of agreement (20.05.2025). ESL has been actively exploring ways to enhance its operational efficiency in response to increasing competition in the green technology market. One of its flagship offerings, the "TBU" unit, initially gained significant traction due to its novel design and alignment with sustainability trends. Over time, however, the entry of similar products by competitors in both domestic and international markets created pricing pressures, limiting ESL's ability to raise prices despite rising input costs. To sustain profitability and retain market share, ESL adopted change in technology resulting in a 25% increase in standard labour efficiency. While implementing new technology, ESL availed the technical services of Click Ltd., UK on 20th December, 2024. ESL raised the self invoice for 2,00,000 on 28th December, 2024 in respect of such technical services. ESL made payment on 22nd January, 2025. After achieving improved production efficiency and cost optimization for its product "TBU," ESL began actively bidding for public sector tenders across various states. The company aimed to expand its institutional customer base and leverage economies of scale by targeting large-volume contracts. As part of this effort, ESL participated in a competitive bidding process initiated by the Tamil Nadu Electricity Board (TNEB) for the supply of product “TBU”. After completing the technical evaluation and pricing scrutiny, ESL's proposal was shortlisted, and the company was awarded a contract for the supply of 20 lakh units of "TBU" at a total contract value of 25 Crores. ESL supplied the product as per terms and conditions of the purchase order and that too before the deadline. TNEB withheld - 2.5 Crores which is payable after 12 months and paid the balance after deducting TDS under the Income-tax Act and under GST. ESL earned net profit of 4 Crores from this supply. Despite being fully immersed in ESL's operational responsibilities, Jaynam began exploring alternate avenues to diversify the company's financial strategies. During a business leadership seminar, he participated in a roundtable discussion on strategic asset allocation for companies with surplus cash flow. Inspired by insights from global CFOs, he decided to apply some of those principles to ESL's own finances. Around the same time, ESL had generated substantial profits from various contracts, and the finance team had been exploring how to deploy surplus funds without compromising liquidity. Seeing an opportunity to blend risk-managed investing with return maximization, Jaynam began to personally experiment with stock and commodity transactions on recognized exchanges during the financial year 2024–25, as detailed in ANNEXURE II. However, after getting some experience of stock and commodity market, Jaynam formed a view that professionals only could handle the investments and there is no point in wasting the hard earned money through unprofessional techniques. Accordingly, He discussed the idea with Ritik and suggested that a portfolio could be created using the reserve funds from the profits earned by ESL through its supplies to TNEB. He also proposed that CA Kailash, an expert in managing such portfolios, should be appointed to handle it. All legal and other formalities have been duly fulfilled by ESL related to Portfolio management business. The terms of his remuneration will be that CA. Kailash is eligible for 0.20% of portfolio as fee. Also, he will be paid for a fee incentive @ 1% which will be linked to gross return in excess of the portfolio maximum value since its inception. The Maximum value of the portfolio reached - 4.40 Crores in last 6 months. ANNEXURE I DAILY NEWS ESL Leads the Way in Green Energy Innovation Aligned with Government's Sustainability Push Bengaluru, April 2024 - As India progresses toward its long-term clean energy targets, Energy Solutions Limited (ESL), a Bengaluru-based company, continues to expand its presence in the renewable technology space. Founded in August 2010 by Jaynam and Ritik, ESL operates in areas such as hybrid energy storage systems and smart grid components—segments that are gaining attention in line with national sustainability policies. Began the manufacturing of smart grid components and hybrid energy storage solutions, even before any legislative compulsion. Commenting on this early move, co-founder Jaynam stated, “We didn't wait for a law to tell us what's right. We believe in creating a cleaner, smarter future and business should lead the way." ESL also reports environmental data annually to the Ministry of Environment and Forests, including figures related to collection, recovery, and recycling of packaging waste, target fulfillment, and tax declarations. These reports form part of the statutory requirements for companies engaged in product manufacturing and distribution. Internally, ESL has launched an energy efficiency initiative branded “Go Eco,” which, according to the company, resulted in a 20% reduction in its energy usage and cost savings of approximately 35 lakh. Co-founder Ritik noted, “We wanted to walk the talk, not just produce for a greener world but also operate like one. Clean energy is not just ethical, it's efficient." As India's energy landscape continues to diversify, ESL represents one of several private sector firms adapting to a policy environment increasingly focused on sustainability, energy efficiency, and reduced carbon dependency. Annexure II A personalized report detailing transactions in shares and commodities for FY 2024–25 was downloaded from Jaynam's Demat account using his credentials. Transactions of shares and commodities Aggregate value Profit (loss) Day trade transactions in BSE 170 14 Day trade transactions in NSE 134 (12) Commodity derivative trade in recognized stock exchange 1044 (50)