Monitoring Agency Report for the quarter ended on 30th June, 2025.
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CARE Ratings, the Monitoring Agency, flagged deviations in the use of Rs. 160.72 crore raised through the company's recent IPO. The company used Rs. 98.71 crore for working capital against the Rs. 95 crore allocated, an excess of Rs. 3.71 crore (10–25% deviation range), without shareholder approval. IPO proceeds were routed through multiple current accounts causing comingling of funds, and Rs. 7.97 crore in FD balances were temporarily swept out for business use over 15 days in April 2025. Board approval was missing before Rs. 3.41 crore of General Corporate Purpose funds were spent on issue expenses and working capital. As of June 30, 2025, Rs. 119.91 crore has been used and Rs. 40.81 crore remains unutilized, parked in ICICI Bank FDs and escrow accounts. Management says this was an oversight, not intent, and is rectifying by removing the auto-sweep facility and reinstating the FD balance.
While management describes this as a minor temporary oversight, the missing shareholder approval and use of IPO funds outside declared objects are governance red flags. Retail investors should note the deviation and watch for any SEBI follow-up, as the stock may see short-term pressure on disclosure of weak IPO fund discipline.