Please find attached the monitoring agency report for the quarter ended March 31 2026
MOREPENLAB · price
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CARE Ratings, the monitoring agency for Morepen Laboratories' Rs 200 crore QIP (Aug 2024), has submitted its report for Q4 FY26. Out of Rs 189.08 crore in net proceeds, Rs 175.52 crore (93%) has been utilized—working capital of Rs 66.29 crore is fully deployed, while Rs 109.23 crore of Rs 122.79 crore has gone toward manufacturing modernization at Baddi and Masulkhana. The agency flagged that Rs 1.15 crore was transferred from the monitoring account to current accounts for local disbursements, raising traceability concerns; end-use is confirmed only via management and CA certificates. The timeline for Rs 13.56 crore allocated for medical devices at Baddi has been extended to March 31, 2027. The report also notes subdued profitability over four quarters due to API segment margin compression (though Q3FY26 showed improvement) and a GST show cause notice for Rs 117.94 crore for FY21-FY24, though the company obtained a stay from the Himachal Pradesh High Court.
The QIP funds are largely on track, but fund commingling and delayed medical device capex at Baddi are concerns. The Rs 117.94 crore GST notice is a material contingent liability. Investors should monitor profitability recovery in API business and any adverse ruling on the GST matter.