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Figures converted from INR at historical FX rates — see data/company.json.fx_rates. Ratios, margins, multiples, share counts and percentages are unitless and unchanged.

The Verdict at a Glance

Onyx earns a D on governance. Promoters own 65.1% of the company, so alignment of interest is real — but alignment of control is the problem. Four of eight directors come from the founding families, the audit committee seats the CFO who is the audited executive, the three "independent" directors were all installed weeks before the November 2024 IPO and are still untested, the company carries ~$149K of unsecured loans from the same promoter group it now pays salaries to, and a Note 38 in the FY25 annual report flags a ~$295K gap between trade receivables reported to lenders and those in the books. FIIs took the hint: their stake collapsed from 8.7% at listing to 1.1% by Mar-2026.

Governance Grade: D

1. The People Running This Company

Onyx is run by three intermarried promoter families — the Jains, the Singhs/Kaurs, and the Mahajans — plus three independent directors who were appointed within four months of the IPO. The headline question is not capability; the headline question is whether the structure can ever produce a serious challenge to a promoter decision.

What matters about this lineup:

• Sanjay Jain and Naresh Kumar are the two founders; they each took ~$2,910/month and have been with the company for 20 years. Capability and continuity are not the issue.
• Harsh Mahajan holds CEO, CFO and Whole-Time Director simultaneously. Combining the financial gatekeeper and operational head in one 38-year-old appointee — installed three months before the IPO — concentrates control rather than diluting it. He also sits on the Audit Committee that is meant to audit him.
• Lakshya Jain is a Jain-family executive director; the company's standard "not related to any director" disclosure applies only to Sanjay Jain personally, not to the broader promoter group.
• The three Independent Directors all joined on 26-July-2024, four months before listing. Their combined tenure with the company is shorter than the time the stock has been falling.

2. What They Get Paid

Pay is small in absolute terms — but it is the uniformity that gives the game away. Every executive director, regardless of role, age or seniority, was paid an identical $24,254 in FY25. There is no link to performance, no equity component, no differentiation between a 20-year founder and a one-year CEO. SME-listed companies are exempt from most SEBI remuneration disclosure norms, and Onyx has used that exemption fully.

Total key-management compensation in FY25 was roughly $115K against PAT of $579K — about 20% of profit, which is reasonable for a sub-$7M revenue company. The concern is not absolute pay; it is that flat salaries cannot reward or punish anyone. Mehak Sood (a promoter's spouse) drew $17,550 as an employee — three-quarters of what each executive director earned. The board has set itself up so that, structurally, doing well and doing poorly look the same on a payslip.

3. Are They Aligned?

Yes — and no. The promoter group's 65.1% stake (worth roughly $3.9M at the current $0.33 price) is real money on the line. But two of the four economically meaningful alignment tests come back negative.

FII flight

Foreign institutional holdings dropped from 8.72% at listing to 1.07% in eighteen months — institutional capital walking out the door, not in. Public/retail picked up the slack, rising from 22.9% to 31.4%.

Insider activity post-IPO

There has been no insider buying. The visible post-IPO action has been anchor investors selling: Zeta Global Funds, Globalworth Securities and others have unloaded blocks in Aug-Sep 2025 and Mar 2026 as anchor lock-ins lapsed. No promoter has stepped into the open market to add to a stake that is down ~48% from the listing price.

Related-party behaviour

This is the section where the structure becomes uncomfortable. Onyx's FY25 RPT note discloses transactions across 17 individual related parties and four promoter-controlled entities.

Three observations:

• ~$149K of unsecured promoter loans remain on the books. The IPO raised ~$3.5M, and one of the stated uses was "prepayment or repayment of certain loans" — i.e. the company used public money in part to repay its own promoters. ~$140K was repaid in FY25 and a further ~$149K remains, with no maturity date disclosed.
• Imperial India — a promoter-controlled entity — received $22,897 from Onyx for machinery repair and maintenance in FY25 (up from $12,890 in FY24) and is owed $8,518 at year-end. The company's vendor of choice for repairs is run by its own promoters; the audit committee, which includes the CFO, accepted this as "arm's length."
• Mehak Sood, a promoter's spouse with no disclosed operational role, drew a salary of $17,550 — 75% of what each executive director earned.

The FY24 RPT note also discloses ~$131K of personal "gifts" cycled through company books between Fateh Pal Singh, Parmjeet Kaur, Marshal Ahluwalia and Mehak Sood. These do not flow through P&L but are highly unusual transactions to disclose at the corporate-entity level.

A working-capital reporting gap

Note 38 of the FY25 audited statements reconciles quarterly Drawing Power statements submitted to the company's lenders against the audited books. The gaps are material:

The company's own explanation is that DP statements were sent to the bank before period-end adjustments were finalised. That is plausible — but a $295K gap on trade receivables is 13% of the year-end receivables balance, and it consistently shows lenders larger collateral than the books support. This is an internal-controls flag, not a fraud flag, but it is the kind of thing FIIs notice.

Capital allocation behaviour

Onyx paid no dividend in FY25 (PAT $579K, net cash ~$1.0M). That is reasonable for a company that has just IPO'd and is mid-expansion. But the company also has not initiated a buyback at sub-book-value prices (CMP $0.33 vs book $0.32), and the promoters have not added to their stake despite the ~48% drawdown from the IPO price.

Skin-in-the-game score: 5 / 10

The 65% promoter stake is the only thing keeping this score from being lower. The negatives — no ESOPs, flat salaries with zero performance link, unsecured promoter loans, related-party payments to promoter entities, salaried promoter spouses, no insider buying during the drawdown — collectively offset most of the ownership-based alignment. Promoters benefit when shareholders benefit, but they also extract steady cashflow from the company independent of share-price performance.

4. Board Quality

The board is structurally compliant and substantively weak. SME-listed companies are exempt from most SEBI listing-regulation requirements on audit, NRC and SRC composition — and Onyx has used that exemption to assemble a board that meets the letter of the Companies Act 2013 without the spirit of any of it.

Where the structure fails

Independent? Or formally independent?

All three independent directors were appointed by the existing promoter board on 26-July-2024, four months before the IPO. They have served for ~22 months. None have other listed-company directorships disclosed. The annual report records that they met once without management in FY25 — the minimum required. There is no evidence of dissent on any board vote. The "Director's Report" notes that no recommendation of any committee has ever been rejected by the board — taken as a positive, but in practice it usually reflects an absence of friction rather than the presence of agreement.

Auditors

No qualifications, reservations or adverse remarks have been issued by either the statutory or secretarial auditor. The Drawing Power reconciliation in Note 38 was disclosed by management, not flagged by the auditor. The FY25 AGM also voted to replace the secretarial auditor (from Md. Shahnawaz to M Shahnawaz & Associates) — same surname, possibly the same person now operating through a firm. Worth tracking but not material on its own.

5. The Verdict

Governance Grade: D

The case for a higher grade. Promoters own 65.1% — they cannot exit easily, and they bear the brunt of the ~48% post-listing share-price decline. Absolute compensation is small ($24,254 per director); no extraction is happening through pay. The CDMO franchise is genuine, the customer roster (Sun Pharma, Mankind, Dr Reddy's, Macleods) is high-quality, and the FY25 RPT note is at least fully disclosed rather than buried. Founders Sanjay Jain and Naresh Kumar have run this business for 20 years.

The case for a lower grade. The board cannot challenge management because the management is the board — four of eight directors are promoter family or family-linked, and the three Independent Directors all came in together four months before the IPO. The Audit Committee includes the CFO. ~$149K of unsecured promoter loans sit on the balance sheet, with IPO proceeds having been used in part to repay them. ~$23K flows annually to a promoter entity (Imperial India) for repairs. A promoter spouse with no operational role earns 75% of an executive director's salary. The Drawing Power reconciliation gap of $295K in Q4 FY25 is the kind of internal-controls signal that FIIs read as "we cannot trust the numbers." FIIs accordingly cut their stake by 88% in 18 months.

Settling on D. This is not a fraud case. It is a governance-lite case — an SME that has used every SEBI exemption available to it to build a structure where promoters control the audit, set their own pay, employ their relatives, run related-party vendor relationships, and have no equity-based pay-for-performance mechanism. None of that is illegal. None of it would survive scrutiny on the SEBI main board.