Ester Industries Limited has submitted its quarterly monitoring agency report for the preferential issue of warrants for the quarter ended December 31, 2025. The report, mandated under Regulation 32(6) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, provides insights into the utilization of proceeds from the company's Rs 174.99 crore preferential issue.

Issue Details and Structure

The preferential issue was conducted between November 5, 2024, and November 12, 2024, involving convertible warrants. CRISIL Ratings Limited serves as the monitoring agency for tracking the utilization of proceeds from this issue.

Fund Utilization Progress

During the quarter ended December 31, 2025, the company utilized Rs 8.50 crore for its stated objectives. The primary use of funds has been investment in the joint venture company Ester Loop Infinite Technologies Private Limited through equity and unsecured loans.

Deployment of Unutilized Proceeds

The company has prudently deployed Rs 60.45 crore of unutilized proceeds in fixed deposits with Bank of India, earning competitive returns. The remaining funds are strategically placed across multiple fixed deposits with varying maturity periods.

The fixed deposits have generated earnings of Rs 0.48 crore during the reporting period, with returns ranging from 5.50% to 6.35% across different deposit tenures.

Key Concerns and Market Dynamics

A significant concern highlighted in the monitoring report relates to the warrant conversion prospects. The warrants were issued at an exercise price of Rs 158 per share, while the current market price stands at Rs 96.99 as of February 2, 2026. This substantial difference may impact the willingness of warrant holders to convert their warrants into equity shares.

The warrant holders have until May 13, 2026, to exercise their conversion rights, representing 18 months from the allotment date. Out of the total issue proceeds of Rs 174.99 crore, Rs 89.24 crore remains to be received and will only be payable upon warrant conversion.

Compliance and Monitoring Framework

The monitoring report confirms that all utilization has been in accordance with the disclosures made in the offer document. No deviations from the stated objects have been observed, and no material changes in the means of finance have occurred. The company continues to maintain transparency through peer-reviewed independent chartered accountant certificates and management undertakings.

The report demonstrates Ester Industries' systematic approach to fund deployment while highlighting the market-related challenges that may affect the complete realization of the preferential issue proceeds.

Ester Industries announced its unaudited financial results for Q3FY26 ended December 31, 2025, showcasing strong operational performance in specialty segments despite facing significant margin pressures. The company reported consolidated net loss of ₹124.13 million compared to a profit of ₹248.16 million in Q3FY25, while demonstrating resilience through substantial growth in specialty polymer and rPET volumes.

Financial Performance Overview

The company's consolidated financial results reflect the challenging external environment characterized by trade tariffs and competitive pressures. Total consolidated income declined marginally to ₹343.50 million from ₹351.00 million in the corresponding quarter of the previous year.

Strong Operational Performance in Specialty Segments

Despite financial headwinds, the company demonstrated robust operational growth in key specialty segments. Specialty polymer sales volume increased significantly from 726 MT in Q3FY25 to 1,063 MT in Q3FY26, representing a 46.4% year-on-year growth. The rPET segment showed exceptional performance with volume growth of 286.7%, increasing from 370 MT to 1,431 MT.

Market Challenges and Recovery Outlook

Chairman Arvind Singhania highlighted the external pressures affecting the BOPET Film segment, primarily from US trade tariffs and predatory pricing of Chinese imports. The company faced margin compression due to tariffs affecting high-margin Value-Added and Specialty Films exports to North America. However, the outlook appears promising with the finalization of a US-India trade deal expected to reduce tariffs from 50% to 18% by mid-March 2026.

Corporate Governance and Leadership Continuity

The Board of Directors approved the re-appointment of Mr. Arvind Singhania as Managing Director designated as Executive Chairman & CEO for another three-year term from April 1, 2026, to March 31, 2029, subject to shareholder approval. The company also approved the re-appointment of Mr. Pradeep Kumar Rustagi as Whole-time Director for the same period.

Nine-Month Performance and Strategic Initiatives

For the nine months ended December 2025, consolidated income grew 7.2% to ₹1,047.60 million, driven by steady demand for specialty polymers and rPET. The company maintained its proportion of Value-Added & Specialty Films at 25% of BOPET Films volume despite competitive pressures. Polyester Films capacity utilization stood at 71% with chips revenue increasing 2.5x year-on-year to ₹302.00 million from ₹122.00 million.