Monitoring Agency Report for the quarter ended on 31st March 2025
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CARE Ratings, the Monitoring Agency, has submitted its first report on the use of Rs. 160.72 crore raised through the company's January-March 2025 IPO. Of the total, Rs. 106.76 crore has been utilized, leaving Rs. 53.96 crore unutilized. Working capital absorbed Rs. 94.14 crore and share issue expenses took Rs. 11.98 crore, while only Rs. 0.64 crore was spent on the Khalapur semiconductor gas facility and nothing on the Mambattu refrigerant facility. The report flags serious governance red flags: funds were routed through multiple current accounts causing co-mingling, Rs. 4.75 crore of issue expenses could not be traced, supporting invoices for Rs. 8.64 crore were not provided, and unutilized proceeds were parked in current accounts instead of the designated Monitoring Agency account. The share price has fallen 57% from issue price to Rs. 72.50, and the CFO resigned in March 2025, with the Company Secretary and Internal Auditor also changed in April 2025.
Negative for shareholders: the stock is trading well below issue price, key managerial personnel are exiting, and the Monitoring Agency has raised concerns about weak documentation and co-mingling of IPO funds, which may weigh on investor confidence and raise corporate governance concerns.