Morepen Laboratories500288Cost overrun notice

Monitoring agency flags capex delay risk on QIP proceeds; Rs. 1.12 crore spent in Q2FY27

CARE Ratings, the monitoring agency for Morepen's Rs. 200.00 crore QIP, has submitted its report for the quarter ended September 30, 2026.

By ScoutQuest · Tue 27 Oct 2026, 3:19 PM IST · 2 min read

QIP Size: Rs. 200.00 crore
Q2FY27 Capex Spend on Modernisation & Expansion: Rs. 1.12 crore
Deviation from Objects of the Issue: Nil

What this update is

This is a quarterly check by an outside agency on how a company has used money raised from large institutional investors. CARE Ratings Limited is the monitoring agency for the Rs. 200.00 crore qualified institutions placement (QIP) of Morepen Laboratories, and this report covers the quarter ended September 30, 2026. The QIP was issued between 01/08/2024 and 05/08/2024 and the securities issued were equity shares.

What the report says

Deviation from the objects of the issue: Nil
The issue proceeds have been utilised in accordance with the objects given in the offer document, as supported by the management and CA certificate
During Q2FY27, the company incurred expenditure of Rs. 1.12 crore towards the stated object of modernization and expansion activities
The means of finance for the disclosed objects have not changed
No major deviation has been observed from the earlier monitoring agency reports

The flagged point

The proceeds earmarked for capital expenditure were originally scheduled to be utilised by March 31, 2026. The agency notes there were delays in capex implementation and the timelines were extended twice by the QIP committee, through resolutions dated April 22, 2025 and April 07, 2026. The agency's comment states that this may lead to a cost overrun, which may adversely impact the overall viability of the object. In its own column, the agency also marks that there are favourable/unfavourable events affecting the viability of these objects.

The company's comment

The company's response in the report says capex is an ongoing process and is not part of any pre-approved project with fixed timelines. It adds that to overcome any cost overrun from the extended time taken, the company has invested unused QIP funds in mutual funds.

Other checks in the report

All utilisation is stated to be as per the disclosures in the offer document
Government/statutory approvals and technical assistance arrangements are stated, per the CA certificate, as not required as per the objects of the issue
The report states there is no other relevant information that may materially affect investor decision making

How to read this

A monitoring agency report is a routine quarterly disclosure for companies that have raised money through a QIP. The two things a reader can take away are that the money is reported as used for the stated purposes with Nil deviation, and that the agency has separately flagged delay in the capital expenditure and the possibility of a cost overrun. The company's explanation and the agency's observation sit side by side in the same report.

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