C2C Advanced Systems, a Bengaluru-based defence contractor backed by Ashish Kacholia and Mukul Agrawal, has seen its shares plummet 70% from January peak amid concerns over delayed receivables, despite ongoing work and a robust order pipeline in defence electronics.
C2C Advanced Systems has become a case study in how quickly market confidence can evaporate when a fast-growing defence contractor runs into collection problems. The Bengaluru-based micro-cap, which counts Ashish Kacholia and Mukul Agrawal among its backers, has lost about 70% from its January peak, even though it continues to win new work in defence and industrial electronics. Moneycontrol reported that the shares fell sharply over two days, bringing them close to the company’s IPO price, as investors focused on delayed receivables and an auditor’s conditional observation on ageing dues.
The immediate concern is cash, not demand. In an earnings call cited in the Trade Brains report, chief executive Krishna Chandra said the overdue balances were tied to material held at ports of delivery and to integration issues on first-of-a-kind defence systems using unfamiliar sensors. Management says the critical subsystems have already been delivered and tested, and it expects to recover at least 80% of receivables more than 180 days past due by September 2026. The company has also said it will retain 8% to 15% of contract value as warranty cover, a move it presents as a way to limit future working-capital stress.
The receivables issue has already drawn scrutiny from auditors. Trade Brains reported that the firm’s auditor flagged the ageing of outstanding dues as a conditional observation under SA-570, while management argued that this is not the same as a going-concern warning. The company has also pointed to a ₹14.5 crore provision under IFRS 9, which it says can be reversed. Management told analysts that the ₹90 crore figure discussed on the call referred to overdue receivables from seven clients, not second-half revenue, and said more than ₹20 crore had already been collected since April 1, with two customers fully settled.
Even so, the business still has supporters. Both Kacholia and Agrawal have retained stakes through the sell-off, a fact that continues to attract retail interest. The company’s shareholding pattern, as reported by LiveMint, shows promoters and promoter group owning 36.98% as of July 28, 2026, with the rest in public hands. The stock was trading around ₹261.50 on that date, underscoring how far it has slid from the highs that followed listing on the NSE on November 29, 2024.
For now, investors are watching the order book almost as closely as the balance sheet. Trade Brains reported that C2C is a nominated vendor for some Ministry of Defence projects, giving it invited access to certain bids rather than open tenders. Management said it has received orders worth nearly ₹100 crore and is tracking a pipeline of more than ₹1,000 crore across India, South-east Asia, the Middle East, Europe and the US. The company is also pushing products such as counter-drone systems, combat management systems for warships and electronic chart display software already used on about 100 Indian Navy ships. Whether that pipeline can outweigh the receivables overhang will probably depend on whether the promised September collections arrive on time.
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