Announced Sat, 14 Feb · 18:05 IST

Report of Monitoring Agency for the Quarter Ended December 31, 2026

Fund Raising View source PDF

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AI summary

Fredun Pharmaceuticals raised Rs. 97.78 crore so far from its Preferential Issue of equity shares and convertible warrants (total issue size Rs. 149.50 crore at Rs. 1,250 per share), but used only Rs. 11.14 crore during the quarter, leaving Rs. 86.64 crore unutilised. Most of the deployment went to Working Capital (Rs. 11.10 crore), while Brand Marketing, R&D, Capex, Strategic Reserves and Contingency heads saw negligible or zero spending. CARE Ratings flagged a 25–50% deviation range, noting Rs. 37 crore was temporarily routed through a Cash Credit account, Rs. 1.84 crore of loan repayments were booked under Working Capital, Rs. 0.04 crore of loan EMI was booked under Capex, and there is a Rs. 3.10 crore gap between the management/CA certificate and the agency's view. The unutilised Rs. 86.64 crore is parked in an HDFC Bank fixed deposit (Rs. 55 crore) and current accounts with SBI, Saraswat Co-op Bank and HDFC.

Likely market impact

The report highlights governance and compliance concerns — funds routed through unintended accounts, loan EMI payments shown under wrong heads, and a shortage of supporting documents. Shareholders may view this negatively as it raises questions about fund-use discipline, though the company maintains no money was diverted. The high unutilised balance also means promised growth projects (marketing, capex, R&D) have barely begun, which could temper near-term growth expectations.