Axiscades Technologies Ltd. announces an acquisition

The Cloud Wave Technologies acquisition metrics and purchase consideration are not verifiable from the cited record; therefore, no defensible valuation multiple can be calculated. Axiscades’ available data is consolidated rather than segment-level, so any comparison would be a proxy rather than like-for-like.

On the latest TTM basis, Axiscades’ consolidated EBITDA margin was 15.20% and PAT margin was 3.30% ^{[7] [8]}. The latest quarter, however, was materially weaker, with EBITDA margin of 6.10% and a negative PAT margin of 8.10% ^{[9] [10]}.

The relevant acquisition multiples would be:

• Revenue multiple = purchase consideration or enterprise value ÷ Cloud Wave revenue
• EBITDA multiple = purchase consideration or enterprise value ÷ Cloud Wave EBITDA
• PAT multiple = equity purchase price ÷ Cloud Wave PAT

The transaction value and Cloud Wave’s disclosed revenue, EBITDA, and PAT are required to complete the calculation. Also, an enterprise-value multiple should not be compared directly with an equity-value multiple.

Assuming the Rs 200 crore NCD is incremental borrowing, with no repayment of existing debt and no equity infusion, Axiscades’ standalone leverage would rise from 0.62x to approximately 1.11–1.12x debt-to-equity. Net debt-to-equity would similarly increase from 0.60x to about 1.10x. The larger concern is interest coverage: it was already negative at -0.62x in Q1 FY27 standalone results, while TTM coverage was only 0.96x; the NCD would weaken it further, with the exact post-issuance ratio dependent on the coupon and timing of interest recognition.

Leverage bridge

The Rs 200 crore borrowing would increase gross standalone debt by approximately 80.76%, from Rs 247.65 crore to Rs 447.65 crore. Using the latest separately reported standalone equity of Rs 401.81 crore as a close reference point ^[16], the pro forma gross debt-to-equity ratio is about 1.11x. The 1.12x figure results from using equity implied by the reported 0.62x ratio; the difference reflects rounding and the absence of a separately reported Q1 FY27 total-equity figure.

Interest-coverage implication

Standalone interest coverage had deteriorated to -0.62x in Q1 FY27, versus 2.03x in Q4 FY26 ^[17]. TTM standalone coverage was 0.96x, down from 1.65x in Q4 FY26 ^[18]. Therefore:

• The company entered the proposed borrowing with negative quarterly coverage and sub-1.0x TTM coverage.
• Incremental NCD interest would increase the denominator in the coverage calculation without changing EBIT mechanically.
• Because Q1 standalone PAT was a loss of Rs 13.87 crore ^[19], the immediate-quarter coverage effect is directionally negative; an exact new ratio cannot be calculated without the NCD coupon, issuance date, and the associated interest expense.
• If the proceeds refinance or retire existing debt rather than add to borrowings, the increase in leverage would be smaller; that use-of-proceeds detail is material.

Analytical read: the issuance would move Axiscades’ standalone balance sheet from moderate leverage to roughly 1.1x debt-to-equity, but the more important credit signal is earnings capacity: standalone interest coverage is already weak, so the NCD creates a meaningful risk that interest obligations will rise faster than operating earnings unless the funded investment produces a rapid improvement in EBIT.

The board outcome dated 5 September 2026 approved an issuance of up to Rs 200 Crores of NCDs to finance the Cloud Wave Technologies acquisition and related transaction expenses. ^[20]

Disclosed NCD terms

• Instrument: Up to 20,000 unrated, unlisted, secured, redeemable, non-convertible debentures, with a face value of Rs 100,000 each. The issue will be made through private placement to eligible investors. ^[21]
• Coupon: 12.50% per annum, payable quarterly. ^[21]
• Tenor: Up to 60 months. The company retains a prepayment option, while investors have a put option, subject to pre-defined conditions. ^[21]
• Repayment: Quarterly repayments begin at the end of the sixth month. The indicative schedule comprises 3% for three instalments, 4% for five instalments, 6% for four instalments, 7% for six instalments and 5% for the final instalment. ^[21]
• Security package: First pari-passu charges over specified assets of Axiscades, AXISCADES Aerospace & Technologies and Mistral Solutions; a first pari-passu charge over specified immovable property; pledges over 51% shareholdings in Mistral and ACAT; an exclusive pledge over Axiscades’ shares in the target; corporate guarantees from specified group entities; and negative liens over shares and assets of subsidiaries. Additional security may be required after due diligence. ^[22]

The terms are therefore substantially disclosed, but the allotment date was still to be determined when definitive agreements were signed, and parts of the security package remained subject to applicable laws and potential arranger requirements. ^{[21] [22]}

Cloud Wave acquisition timeline

The board outcome does not state a completion date or expected closing period for the Cloud Wave Technologies acquisition. It only states that the NCD proceeds will be used for the acquisition and related transaction expenses. ^[20]