Sigachi industries Limited has notified stock exchanges regarding the non-applicability of SEBI Regulation 74(5) compliance certificate requirements for the quarter ended March 31, 2026. The pharmaceutical excipients manufacturer confirmed that the regulatory provision under the SEBI (Depositories and Participants) Regulations, 2018 does not apply to the company's operations during this period.

Regulatory Compliance Status

The company's communication to BSE and NSE, dated April 10, 2026, clarifies the non-applicability of the compliance certificate requirement. This determination was supported by confirmation from the company's registrar and transfer agent, Bigshare Services Private Limited, through their letter dated April 4, 2026.

Reason for Non-Applicability

Bigshare Services Private Limited, acting as the registrar and transfer agent, provided specific reasons for the regulation's non-applicability. The key factors include:

• Entire shareholding of the company remains in dematerialized form
• No requests received from shareholders for rematerialization during the quarter
• No requests received from shareholders for dematerialization during the quarter
• Complete absence of physical share certificate transactions

Regulatory Framework

Regulation 74(5) of the SEBI (Depositories and Participants) Regulations, 2018, which replaced the erstwhile Regulation 54 of SEBI (Depository and Participant) Regulations, 1996, requires companies to obtain compliance certificates from their registrar and transfer agents under specific circumstances. The regulation primarily applies when companies have physical share certificates or when there are requests for conversion between physical and electronic form.

Company Information

Sigachi Industries Limited, incorporated with CIN L24110TG1989PLC009497, operates from its registered office in Hyderabad, Telangana. The company maintains its corporate office at Industrial Park, Sultanpur, Hyderabad. Vivek Kumar, serving as Company Secretary and Compliance Officer, signed the regulatory notification to the exchanges.

This disclosure represents routine regulatory compliance reporting, ensuring transparency with stock exchanges regarding the company's adherence to SEBI depositories regulations. The confirmation from both the company and its RTA provides clarity on the regulatory status for the specified quarter.

CARE Ratings Limited has downgraded the credit ratings of Sigachi Industries across multiple facilities, citing deteriorating financial performance and operational challenges. The rating agency revised the company's ratings from CARE BBB+ to CARE BBB, affecting facilities worth ₹268.00 crore.

Rating Downgrade Details

The comprehensive rating revision affects all major facilities of the pharmaceutical excipient manufacturer:

All ratings continue to be on Rating Watch with Negative Implications, indicating the possibility of further downgrades depending on the company's performance trajectory and investigation outcomes.

Sharp Decline in Q3FY26 Performance

The rating revision primarily stems from Sigachi Industries' significantly weakened financial performance during the third quarter of FY26. The company's operating margin declined drastically to 5.25% in Q3FY26, compared to 8.86% in Q2FY26 and 24.89% in Q3FY25.

The deterioration was driven by elevated raw material and related costs, higher employee expenses, lower production yields, and increased working capital intensity. These factors resulted in a net loss during the quarter and overall moderation in profitability for the nine-month period.

Impact of Hyderabad Facility Fire

The company's performance has been significantly affected by the fire incident at its Hyderabad facility on June 30, 2025. The incident completely destroyed the 6,400 MTPA capacity plant, representing 30% of total installed capacity and contributing 20% of total operating income. The tragedy resulted in 54 fatalities and injuries to 28 employees.

Sigachi Industries announced compensation of ₹1.00 crore per deceased employee and full medical support for the injured. By November 2025, the company had disbursed ₹22.14 crore, averaging ₹0.41 crore per family. Production was subsequently shifted to Dahej and Jhagadia units, though utilization remained at 85% due to mandatory safety audits.

Insurance Claims and Liquidity Concerns

The company had expected to recover approximately ₹51.00 crore in insurance claims for Plant & Machinery losses by December 2025. However, these claims have not yet been received, creating additional pressure on liquidity. Sigachi Industries now expects insurance recoveries to commence in a staggered manner by the end of Q4FY26 or Q1FY27.

Cash and bank balances declined to ₹21.56 crore as of December 31, 2025, compared to free cash balances of ₹49.00 crore as of September 30, 2025. The reduction is attributable to partial compensation payments and capital expenditure incurred during the period.

Future Expansion Plans and Funding

To bridge the liquidity gap and fund expansion plans, Sigachi Industries has proposed to raise ₹125.00 crore through Non-Convertible Debentures. The company plans to expand MCC capacity by 24,000 MTPA and develop CCS facility, entailing cumulative capital expenditure of approximately ₹493.00 crore over the next 2-3 years.

The expansion is proposed to be funded through ₹300.00 crore of equity infusion and internal accruals. The company has already commenced civil work for a major capacity expansion at its Dahej SEZ facility, proposing to add 12,000 MTPA at an estimated project cost of ₹106.00 crore.

Rating Outlook and Monitoring Factors

CARE Ratings continues to monitor several key factors that could influence future rating actions. Positive factors include steady growth in total operating income with PBILDT margin above 17% and successful project completion without time and cost overruns. Negative factors encompass notable decline in total operating income by over 30% year-on-year, PBILDT margin falling below 15%, and elongation of operating cycle beyond 200 days.

The ratings agency emphasized that any financial performance weakening beyond current expectations, including pressure on liquidity, higher-than-anticipated losses, delays in insurance recoveries, or adverse findings from the ongoing investigation, will remain critical monitoring points.

Source: None/Company/INE0D0K01022/0cf39a48-813a-4dab-9e4e-2703b426b905.pdf