Monitoring Agency Report for the quarter ended March 31, 2025
POWERMECH · price
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CARE Ratings, acting as Monitoring Agency, has submitted its quarterly report on the use of proceeds from Power Mech's Rs. 350 crore QIP (Qualified Institutions Placement) held in October 2023. Of the net Rs. 343.40 crore raised, the company has fully used Rs. 20 crore to repay a Bank of Bahrain and Kuwait loan and Rs. 83.40 crore for general corporate purposes, both done in FY24. Only Rs. 21.94 crore has been deployed so far out of the Rs. 240 crore earmarked for setting up a coal washery and handling plant for the Tasra opencast project, leaving Rs. 218.06 crore unutilized. The unutilized amount is parked in fixed deposits with RBL Bank and Bandhan Bank at around 8-8.05% interest, maturing in October-November 2025. The coal washery project is delayed against the original FY24-FY26 timeline, though the company has secured all required government approvals for the Tasra MDO project.
No material deviation from stated objects, so no governance red flag, but the slow deployment of the largest chunk (Rs. 218 crore still idle) and ongoing delay in the coal washery project may limit the near-term growth benefit shareholders expected from the QIP. Idle funds earning ~8% FD returns provide some income cushion while the project ramps up.