Statement of Deviation or Variation for the Quarter Ended December 31, 2026
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Fredun Pharmaceuticals raised ₹97.78 crore in late December 2025 through a Preferential Issue of equity shares and convertible warrants. The Monitoring Agency (CARE Ratings) has flagged multiple deviations in how the proceeds have been handled: ₹37 crore was temporarily routed through a Cash Credit account (not permitted under SEBI ICDR rules), ₹1.84 crore in loan EMIs were classified under working capital, ₹0.04 crore in EMIs were classified under capex, there is a ₹3.10 crore discrepancy in reported utilization versus unutilized proceeds, and funds were commingled across multiple current and cash credit accounts. Of the total ~₹97.78 crore raised, only about ₹8.49 crore has actually been utilized so far — mostly under working capital — with the rest yet to be deployed across brand marketing, R&D, capex, reserves, and contingency. The Board and Audit Committee characterize all observations as procedural and classificatory in nature, deny any actual diversion of funds, and promise stronger internal controls going forward.
This is a negative signal for shareholders — the company raised nearly ₹98 crore but deployed very little of it in the first quarter, while the independent monitor flagged significant compliance lapses including improper parking of funds, commingling of issue money with regular business, and documentation gaps. Investors should watch for stricter segregation of funds in subsequent quarterly filings and any escalation if SEBI takes further action on the deviations.