Monitoring Agency Report for the quarter ended June 30, 2025, with regard to the utilization of proceeds of the QIP of the Company
POWERMECH · price
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Power Mech Projects has filed the CARE Ratings monitoring report for the quarter ended June 30, 2025, tracking the use of Rs. 350 crore raised via a QIP in October 2023 (net proceeds Rs. 343 crore). Of this, Rs. 20 crore for Bank of Bahrain & Kuwait loan repayment and Rs. 83.40 crore for general corporate purposes have been fully utilized as planned. However, only Rs. 36.30 crore (out of Rs. 240 crore earmarked) has been deployed so far for the Tasra opencast coal washery and handling plant project, with Rs. 203.70 crore still unutilized and parked in fixed deposits and a monitoring account. During Q1FY26 alone, the company spent Rs. 14.36 crore on washery installation, but the project is running significantly behind the original FY24 completion timeline, now pushed to FY26 due to delayed government approvals.
The substantial delay in deploying QIP proceeds (over 85% of the main capex allocation still unutilized) is a concern, though funds are safely parked in FDs earning ~8% and there are no deviations from stated objects. Shareholders may view the slow project execution and approval bottlenecks as a negative for near-term growth, but the disciplined fund management limits downside risk.