Monitoring Agency Report shows NIL deviation, but Rs. 2.95 crore of working capital use was related-party
CARE Ratings' Monitoring Agency Report on how EFC (I) used its Rights Issue money in the quarter ended September 30, 2026.
By ScoutQuest · · 3 min read
- Rights Issue size
- Rs. 159.94 crore
- Deviation from objects of the issue
- NIL
- Working capital utilisation / related-party portion
- Of Rs. 18.65 crore used for working capital, Rs. 2.95 crore was related-party transactions; entire Rs. 1.59 crore under General Corporate…
What this update is
EFC (I) Limited has submitted the Monitoring Agency Report issued by CARE Ratings Limited for the quarter ended September 30, 2026. A monitoring agency is appointed when a company raises money through an issue, to keep an independent watch on whether the money is used for the purposes it was raised for.
The report relates to the Company's Rights Issue, which raised an amount aggregating to Rs. 159.94 crore. The securities issued were equity shares.
Deviation from the objects
The report states deviation from the objects of the issue as NIL, and the range of deviation as Not Applicable. It answers "Yes" to whether all utilisation is as per the disclosures in the Offer Document. It also states there was no major deviation observed over earlier monitoring agency reports, and that the means of finance for the disclosed objects have not changed.
Points the monitoring agency flagged
- Co-mingling of funds: the Company transacted the funds through its current accounts and the current accounts and monitoring accounts of its subsidiaries and step-down subsidiaries, which also recorded numerous other business transactions. As a result, there was co-mingling of funds. The agency says it relied on bank statements, a Management Certificate and a CA certificate to monitor utilisation.
- Reimbursement: the agency notes instances in the bank statements where expenditure was incurred prior to the transfer of the proceeds or redemption of fixed deposits, with the proceeds subsequently used by way of reimbursement.
- Prior period invoices: utilisation during the quarter was made against prior period invoices.
The agency adds that utilisation of gross proceeds is in line with the objects of the Letter of Offer and Board Resolution.
Related-party utilisation
The report answers "Yes" to whether there is other relevant information that may materially affect investor decision-making, and sets out:
- Under the object 'Funding the working capital requirements of the Company', out of the total utilisation of Rs. 18.65 crore, Rs. 2.95 crore pertains to related party transactions.
- Under the object 'General Corporate Purposes', the entire utilisation of Rs. 1.59 crore is a related party transaction.
The supporting documents listed for this include bank statements, invoices, and Bigbox Ventures Private Limited related documents including Board Resolution and agreement for Inter Corporate Deposit (ICD).
What the Company said in its comments
- Expenditure was incurred towards the approved objects of the issue only, and where already incurred during the quarter it was reimbursed from the Rights Issue proceeds in the ordinary course.
- Expenditure was incurred as per the payment terms in the underlying invoices, and payments were made during the quarter as they fell due.
- Routing of funds through the current and monitoring accounts of the Company, its subsidiaries and step-down subsidiaries was in the ordinary course of business and for operational efficiency, and the end-use of proceeds was clearly identifiable and traceable.
Other checks recorded in the report
- Shareholder approval for material deviations: Not Applicable.
- All Government/statutory approvals related to the objects: Not Applicable.
- Arrangements for technical assistance/collaboration: Not Applicable.
- Any favourable or unfavourable events affecting the viability of the objects: No.
What a retail investor can read from this
The headline compliance position is clean — no deviation from the stated objects and utilisation stated to be in line with the offer document. At the same time, the report records that a part of the spending was with related parties, that some spending was against prior period invoices and by way of reimbursement, and that proceeds passed through accounts that also carry other business, producing co-mingling. The agency has also stated it does not perform an audit or independently verify the information and certificates it receives.
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3 Nov 2026
EFC (I) Ltd investor presentation: Q2 FY27 revenue up 30% YoY, Ultrafresh acquired for ₹54 Cr
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More numbers
- Rights Issue sizeRs. 159.94 crores
- Total utilisation under working capital objectRs. 18.65 crore
- Related party portion of working capital utilisationRs. 2.95 crore
- Utilisation under General Corporate Purposes (fully related party)Rs. 1.59 crore
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