A-One Steels India Ltd's (ASIPL) red herring prospectus (RHP) puts more detail on the insolvency proceedings and subsequent control of Basai Steels and Power Pvt Ltd, but leaves a key transaction involving land at Basai insufficiently explained. While the subsequent red herring prospectus (RHP) discloses the national company law tribunal (NCLT) proceedings and the Company's association with Basai Steels, it does not clearly set out the circumstances, consideration and commercial rationale surrounding the specific sale of Basai land, raising questions about how the transaction fits into the company's corporate and asset structure ahead of its proposed initial public offering (IPO).
The disclosure assumes significance because A-One Steels' Bellary operations are linked to land associated with Basai Steels, an entity that went through insolvency proceedings before coming under the control of the A-One group. With ASIPL seeking to raise ₹650 crore through the IPO, the treatment of Basai Steels' assets, transactions and liabilities becomes relevant for investors assessing the company's financial and corporate structure.
The company filed its draft red herring prospectus (DRHP) with SEBI on 30 December 2024, proposing to raise ₹650 crore. Founded in 2012, A-One Steels operates steel manufacturing facilities in Karnataka and Andhra Pradesh and produces products including TMT bars, coils, pipes and sponge iron.
The RHP Now Discloses the NCLT Dispute
According to the RHP, Gopal Agarwal, an erstwhile promoter/shareholder of Basai Steels, approached the NCLT Hyderabad bench alleging oppression and mismanagement in the affairs of Basai Steels. The allegations described in the RHP include misuse of powers, diversion of funds and decisions allegedly taken without proper authority or consultation.
The RHP also sets out A-One Steels' response. The company relies on the NCLT-approved resolution plan under which A-One Steels was identified as the strategic investor in Basai Steels. It disputes the petitioner's locus and maintainability, including on the question of the statutory threshold required under Section 244 of the Companies Act.
The RHP further records developments following Gopal Agarwal's death, including proceedings involving his legal heirs.
In other words, the existence of the principal NCLT dispute is no longer absent from the IPO document. It is expressly disclosed.
But the disclosure becomes more complicated when the individual allegations contained in the subsequent proceedings are compared with the RHP.
The 30-year Lease Allegation Has Changed in the RHP
One of the issues raised in the petition concerns the lease underlying A-One Steels' Bellary facility.
The applicants allege that A-One Steels had previously represented in its DRHP that the facility was held under a 30-year lease from Basai Steels, while the registered lease deed available to them was for nine years from 1 July 2017, expiring on 30 June 2026.
The RHP now presents the position differently.
In its property disclosures, A-One Steels records the Bellary facility 1 lease as having a tenure of nine years, extended by three years, effectively describing a 12-year tenure. The RHP therefore does not repeat the earlier 30-year formulation in its current asset and property disclosure.
That is a significant change between the earlier DRHP disclosure and the RHP.
It does not, however, resolve the underlying dispute over what lease rights were actually created or extended. That question remains part of the proceedings described by the applicants.
Basai's Assets and Bajaj Finance Financing are Disclosed
Another allegation in the NCLT proceedings concerns the use of Basai Steels' assets to finance A-One Steels.
The petition alleges that Basai Steels' properties were mortgaged and that Basai also provided a corporate guarantee in connection with financing obtained by A-One Steels from Bajaj Finance Ltd.
The RHP now provides substantial disclosure of this arrangement.
It lists term-loan facilities from Bajaj Finance and states that the primary security includes an exclusive charge over the immovable and movable fixed assets of Basai Steels and Power, together with a corporate guarantee provided by Basai Steels.
The RHP also identifies corporate guarantees provided by subsidiaries or group companies as a risk, as they can create contingent liabilities if invoked.
Thus, unlike the earlier DRHP position, the existence of the Bajaj Finance financing and the use of Basai assets as security are now expressly visible in the RHP.
The petitioners' separate contention—that the use of Basai's assets in this manner was contrary to the NCLT-approved resolution plan—is an allegation before the tribunal and is not an established finding.
A-One Steels' Control of Basai Is Also Expressly Disclosed
The RHP also gives considerably more detail about A-One Steels' ownership of Basai Steels.
It identifies Basai Steels as a subsidiary and records A-One Steels' 78.14% equity holding, comprising 921,337,000 shares of ₹1 each.
The RHP states that A-One Steels acquired a 70% stake pursuant to the NCLT-approved resolution plan, with the relevant allotment taking place on 23 November 2024, following an investment of ₹92.13 crore towards dues owed to secured financial creditors and operational creditors.
The petitioners dispute aspects of this ownership structure and have questioned whether the manner in which A-One Steels obtained and subsequently represented its stake was consistent with the approved resolution plan.
Those competing positions are now part of the disclosure landscape surrounding the IPO.
But One Transaction Stands Out: The 13.03-acre Land Sale
The most specific issue that does not appear to have been separately disclosed in the RHP is the alleged sale of three parcels of Basai Steels' land to A-One Defence and Aerospace Pvt Ltd.
According to the NCLT application reviewed for this story, on 14 December 2025, Pardeep Garg, acting on behalf of Basai Steels, executed three registered sale deeds in favour of A-One Defence and Aerospace.
The three parcels were:
The applicants challenge these transactions, alleging that the sales were undertaken without the requisite corporate approvals and by a person whose own appointment to Basai's board was under challenge.
They seek, among other reliefs, cancellation of the three sale deeds and restoration of the land to Basai Steels.
The applicants also cite a valuation report from Edelweiss ARC Mumbai dated 15 February 2024, which they say valued the relevant land at approximately ₹8 lakh–₹12 lakh per acre. On that basis, they contend that the aggregate consideration of ₹26.06 lakh was substantially below the value they attribute to the property.
Those valuation figures are the applicants' submissions and have not been established as findings of the tribunal.
What the RHP Says and Does Not Say About the Land
The RHP discloses Basai Steels' substantial landholding associated with the Bellary facility 1. It records about 131.91 acres in connection with the facility. It also discloses A-One Defence and Aerospace as a group/related entity.
The RHP records that A-One Defence was incorporated on 15 May 2025, and separately discloses transactions between A-One Steels and the company. These include rental income and reimbursements.
It also records a significant subsequent event: A-One Steels extended a ₹185 crore corporate guarantee in favour of State Bank of India (SBI) for credit facilities sanctioned to A-One Defence and Aerospace.
What the RHP does not appear to separately identify, however, is the December 2025 disposal of the three Basai land parcels.
There is no specific disclosure in the RHP of:
- the three sale deeds dated 14 December 2025;
- the aggregate 13.03-acre transfer;
- the ₹26.06 lakh consideration;
- the individual consideration paid for each parcel;
- the 4 December 2025 deed of partial release by Bajaj Finance relating to the relevant properties; or
- the specific interlocutory application seeking to have those sale deeds declared null and void.
The RHP's general disclosure of Basai's landholding and Bajaj Finance's security over Basai assets, therefore, needs to be distinguished from disclosure of this particular transaction.
The Timing Makes the Distinction Important
The chronology is notable. The petition alleges that Bajaj Finance released its charge over the three parcels on 4 December 2025 and that the three sale deeds were executed only ten days later, on 14 December 2025.
The RHP was issued substantially later and therefore contains information about developments occurring after the original December 2024 DRHP.
The question is consequently not whether the company knew that Basai existed, that Basai's assets were being used as security, or that litigation existed. Those matters are disclosed.
The narrower disclosure question is whether the specific December 2025 land transaction and the challenge to it should have been separately identified in the RHP.
That is ultimately a matter of the applicable disclosure requirements and the facts and the materiality assessment for the transaction. The comparison of the documents, however, shows that the specific land-sale allegations are not reproduced in the RHP in the detail in which they appear in the NCLT application.
The Proposed Amalgamation Is Also Now Disclosed
The NCLT proceedings have developed beyond the original oppression and mismanagement petition.
The RHP discloses the proposed Scheme of Amalgamation involving Basai Steels, A-One Gold Pipes & Tubes Pvt Ltd and A-One Steels.
The boards approved the scheme on 14 March 2026, with an appointed date of 1 October 2025.
The RHP also discloses the first motion application before the NCLT Hyderabad Bench, CA (CAA) No. 13/230/HDB/2026, and the tribunal's order dated 11 May 2026 directing meetings of shareholders and creditors.
It further records proceedings concerning the proposed transfer of Basai's registered office from Telangana to Karnataka, as well as an interlocutory application by minority shareholder K Ravi Shankar challenging the proposed share-swap ratio.
The petitioners have alleged that the amalgamation and proposed registered-office transfer could affect the jurisdiction in which the existing disputes are being heard.
That characterisation remains an allegation by the petitioners; the RHP itself discloses the corporate actions and related proceedings.
A Broader Web of Litigation Is Now Visible in the RHP
The RHP also records other proceedings connected with the dispute. These include a defamation and business disparagement suit filed by A-One Steels against members of the Agarwal family and others, in which the company seeks damages of ₹20 crore. The RHP separately refers to complaints before SEBI's SCORES mechanism, FIR no8/2026 and criminal proceedings concerning company records.
These disclosures mean that an investor reading the RHP can now see that the Basai matter is not limited to a single oppression-and-mismanagement petition.
There are parallel corporate, civil, regulatory and criminal proceedings involving overlapping parties and events.
What Changed from the Earlier DRHP?
The comparison among the DRHP, the NCLT pleadings, and the RHP yields a more nuanced picture than the original IPO story suggested.
The RHP Now Expressly Discloses:
The Basai litigation: including CP No. 29/241/HDB/2025 and the allegations of oppression, mismanagement and diversion of funds.
The lease position: Bellary Facility I is described as being subject to a nine-year lease extended by three years, rather than a 30-year lease.
The Bajaj Finance security: including charges over Basai's movable and immovable fixed assets and the corporate guarantee from Basai.
A-One's Basai shareholding: the RHP identifies Basai as a subsidiary and records A-One Steels' 78.14% holding.
A-One Defence: the newly incorporated group company is identified, along with related-party transactions and the subsequent ₹185 crore SBI corporate guarantee.
The amalgamation: the proposed merger of Basai and A-One Gold Pipes & Tubes into A-One Steels, together with related NCLT proceedings, is disclosed.
But One Particular Transaction Remains Materially Less Visible:
The alleged 14 December 2025 sale of 13.03 acres of Basai land to A-One Defence for ₹26.06 lakh.
The issue, therefore, is no longer simply whether A-One Steels disclosed the Basai controversy. It did.
The more precise question is whether disclosure of the broader litigation and financing arrangements was sufficient, or whether the specific transaction involving the transfer of 13.03 acres of Basai property to a related group company for ₹26.06 lakh, following the release of Bajaj Finance's charge over those parcels, required separate and more detailed disclosure.
The NCLT application seeks to have those transactions annulled. The RHP does not appear to describe them specifically, even though it identifies Basai's landholding, the Bajaj Finance security arrangement, A-One Defence as a related/group company and the broader NCLT dispute.
That distinction matters because the land sale is not merely another allegation in the proceedings. On the petitioners' case, it concerns the disposal of a specific asset of a subsidiary to another group entity, while the ownership, board authority and use of Basai's assets were already under dispute.
Whether that omission constitutes a violation of applicable disclosure requirements is a question for the relevant legal and regulatory framework and, if contested, the competent authorities. The documents establish the difference in what is alleged in the NCLT proceedings and what is specifically set out in the RHP; they do not by themselves establish wrongdoing.
For prospective investors, the relevant documents therefore warrant reading together: the RHP, the NCLT pleadings, the underlying corporate records and the company's responses to the allegations.
Disclaimer: This article is based on documents reviewed by the author, including A-One Steels India Ltd's RHP and pleadings filed before the NCLT Hyderabad Bench. Allegations contained in the NCLT proceedings are attributed to the applicants and have not been treated as established facts. The comparison of disclosures is based on the documents reviewed and is not a legal opinion on whether any particular disclosure was legally required. This article does not constitute investment advice.
