Monitoring Agency Report for the quarter ended 31st March, 2025
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CARE Ratings, acting as Monitoring Agency, has filed its report for the quarter ended March 31, 2025, on the company's Rs. 103.56 crore Preferential Issue of equity shares and convertible warrants. The issue was undersubscribed, with the size reduced from the original Rs. 132.77 crore, and costs of the three stated objects (working capital, subsidiary investment, general corporate purposes) were proportionately revised. During the quarter, Rs. 74.82 crore was utilized, leaving Rs. 12.74 crore unutilized. The Monitoring Agency flagged deviations: the company used part of the 'general corporate purposes' allocation to give inter-corporate deposits (ICDs) to vendors, and parked unutilized funds in equity-linked Portfolio Management Services (PMS) instead of liquid instruments, which the MA says is not in line with the offer document. The MA also noted an unrealized loss of Rs. 0.54 crore on PMS investments.
The flagged deviations raise governance concerns for shareholders, as the company deployed preferential issue funds into ICDs and market-linked PMS investments that were not explicitly approved in the offer document. The company's board disputes the MA's observations, citing board authorization, but investors should watch for follow-up clarifications and any SEBI action, as this could affect confidence in how raised capital is being managed.