Monitoring agency flags delay in use of preferential issue proceeds; Rs. 0.05 crore in subsidiary account
CARE Ratings' monitoring agency report for the quarter ended September 30, 2026 on the Rs. 212.20 crore preferential issue.
By ScoutQuest · · 3 min read
- Deviation from objects
- Nil
- Unutilised preferential issue proceeds
- Rs. 42.04 crore of the Rs. 212.20 crore still unutilised
- Revised working capital allocation
- working capital raised to Rs. 201.39 crore with shareholder approval
What this report is
This is the quarterly monitoring agency report from CARE Ratings Limited, appointed to track how the company uses money raised through a preferential issue of equity shares and convertible warrants aggregating Rs. 212.20 crore. It covers the quarter ended September 30, 2026. The company states there has been no deviation in the utilisation of issue proceeds from the objects approved by shareholders, and the report records deviation from objects as Nil.
Where the money stands
- Total amount utilised as at the end of the quarter: Rs. 170.16 crore
- Total unutilised amount: Rs. 42.04 crore
- Amount utilised during the quarter: Rs. 0.00 crore — the report notes there was no utilisation of funds during the quarter
- Of the unutilised sum, Rs. 42.00 crore is held in fixed deposits with Bank of Baroda, with a market value of Rs. 46.53 crore at the end of the quarter
- Rs. 0.05 crore is held in the subsidiary's Bank of Baroda current account
How the objects were re-drawn
Shareholders approved revisions of the cost of objects through special resolutions dated April 30, 2026 and September 09, 2026:
- Repayment of debt/borrowings of the company and/or its subsidiary: original Rs. 50.00 crore, revised to Rs. 3.78 crore
- Working capital requirement of the company and/or its subsidiary: original Rs. 147.20 crore, revised to Rs. 201.39 crore
- General corporate purpose: original Rs. 15.00 crore, revised to Rs. 7.03 crore
- Total: Rs. 212.20 crore on both the original and revised basis
The stated reason for the revision is that, as per FY26 results, there has been an increase in the inventory and collection cycle of the company, leading to an increase in working capital requirements of the company and its subsidiary. As per the revised cost, utilisation towards repayment of debt/borrowings and general corporate purpose stands completed; working capital is described as ongoing.
What the monitoring agency flagged
- There is a delay in utilisation of the second, third, fourth, fifth and sixth tranches of funds
- Part of the unutilised proceeds, Rs. 0.05 crore, was deployed in the subsidiary's current account at the end of the reporting quarter, where other transactions take place, leading to co-mingling of funds, which the agency says is not explicitly allowed as per the Offer Document
- Fixed deposits of unutilised funds were created from the current account, not directly from the designated monitoring account
- Against the question whether all utilisation is as per the disclosures in the Offer Document, the reply recorded is "No"
Tranche-wise position
- February 20, 2024: Rs. 117.13 crore received, unutilised 0.00 — no delay
- March 28, 2024: Rs. 31.69 crore received, unutilised 0.00 — delay of 124 days
- December 17, 2024: Rs. 31.69 crore received, unutilised 10.35
- June 25, 2025: Rs. 6.34 crore received, unutilised 6.34
- July 11, 2025: Rs. 12.675 crore received, unutilised 12.675
- July 28, 2025: Rs. 12.675 crore received, unutilised 12.675
- Total received Rs. 212.20 crore; total unutilised Rs. 42.04 crore
How to read it
The report confirms the overall money is still parked and being tracked, with nil deviation from the revised objects. At the same time, it records that the pace of spending is behind schedule for the later tranches and points to two process points — funds routed through the subsidiary's current account and fixed deposits created outside the designated monitoring account. These are the observations a reader would weigh against the confirmed nil deviation.
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More numbers
- Issue size of preferential issueRs. 212.20 crore
- Total amount utilised as at end of quarterRs. 170.16 crore
- Total unutilised amount at end of quarterRs. 42.04 crore
- Amount utilised during the quarterRs. 0.00 crore
- Unutilised proceeds held in subsidiary's current accountRs. 0.05 crore
- Revised cost - working capital requirementRs. 201.39 crore
- Revised cost - repayment of debt/borrowingsRs. 3.78 crore
- Delay on tranche received March 28, 2024124 days
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