Fredun Pharmaceuticals has come under scrutiny from its monitoring agency Care Ratings Limited over the utilization of proceeds from its preferential allotment for the quarter ended December 31, 2025. The monitoring report, dated February 14, 2026, highlights several deviations from SEBI guidelines in the deployment of the Rs. 97.78 crore raised through the issue.

Key Deviations Identified

Care Ratings identified deviations in the 25-50% range, citing four primary concerns in the fund utilization process. The most significant issue involved the temporary parking of Rs. 37.00 crore in cash credit accounts before transferring to current accounts, which violates SEBI ICDR Guidelines.

The monitoring agency also flagged discrepancies in management and CA certificates, noting that unutilized proceeds shown as deployment in cash credit accounts (Rs. 2.65 crore) had debit balances. Additionally, the certificates showed a shortfall of Rs. 0.45 crore in unutilized proceeds, resulting in working capital utilization being higher by Rs. 3.10 crore compared to the certificates.

Fund Utilization Breakdown

During the quarter ended December 31, 2025, the company utilized Rs. 11.14 crore out of the total Rs. 97.78 crore raised. The utilization was primarily concentrated in two areas:

The company reported no utilization during the quarter for Brand Marketing & Distribution (Rs. 49.00-50.00 crore allocation), Formulation Development & R&D (Rs. 7.00-8.00 crore allocation), Strategic & Statutory Reserves (Rs. 22.00-23.00 crore allocation), and Contingency/Miscellaneous (Rs. 7.00-7.50 crore allocation).

Deployment of Unutilized Proceeds

The remaining Rs. 86.64 crore in unutilized proceeds has been deployed across multiple financial instruments and bank accounts:

Company's Response

The Board of Directors and Audit Committee have provided detailed responses to each deviation. Regarding the Rs. 37.00 crore routing issue, the company stated that the temporary routing through cash credit accounts was purely operational, with no funds utilized for purposes other than stated objects. For the loan EMI payments, the company clarified that the Rs. 1.84 crore pertains to working capital borrowings intrinsically linked to the company's working capital cycle, while the Rs. 0.04 crore EMI payment relates to term loans for capital expenditure purposes.

Issue Structure and Timeline

The preferential issue originally proposed Rs. 153.25 crore but was revised to Rs. 149.50 crore through a stock exchange filing on December 18, 2025. The company issued 6,44,360 equity shares and 5,51,600 convertible warrants at Rs. 1,250 per share, including a share premium of Rs. 1,240 per share. The allotment date was December 29, 2025, with the balance 75% for warrants to be received within 18 months.

All projects remain within their implementation timelines as specified in the December 18, 2025 corrigendum, with completion periods ranging from 6-9 months for contingency items to 18-24 months for strategic reserves and brand marketing initiatives.

Fredun Pharmaceuticals Limited has announced its unaudited financial results for the quarter ended December 31, 2025, demonstrating robust financial performance. The Board of Directors approved these results at their meeting held on February 9, 2026, in compliance with Regulation 33 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Financial Performance Overview

The pharmaceutical company delivered strong operational results during the third quarter. The financial statements were prepared in accordance with Indian Accounting Standards (Ind AS) and subjected to limited review by statutory auditors R.H. Nisar & Co.

Standalone Financial Results

Nine Months Performance

For the nine months ended December 31, 2025, the company reported net sales of ₹42,291.45 lakhs compared to ₹28,626.86 lakhs in the corresponding period of the previous year, representing a growth of 47.73%. Net profit for the nine-month period stood at ₹2,697.62 lakhs against ₹1,373.58 lakhs in the previous year, marking a 96.37% increase.

Consolidated Results

The consolidated financial results include the performance of subsidiaries Fredun Retail Private Limited, One Pet Stop Private Limited, and Wagr Retail Private Limited. Consolidated net sales for Q3 FY26 were ₹15,992.63 lakhs with a net profit of ₹1,047.80 lakhs.

Key Financial Metrics

Earnings Conference Call Recording Available

Pursuant to Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the company has made available the audio recording of the earnings conference call held on February 12, 2026. The conference call discussed the unaudited financial results for the quarter ended December 31, 2025.

Conference Call Details

Board Meeting and Regulatory Compliance

The Board Meeting commenced at 11:00 AM and concluded at 1:50 PM on February 9, 2026. The company has fulfilled its regulatory obligations under SEBI regulations, with Managing Director Fredun Nariman Medhora (DIN: 01745348) signing the compliance documents.

Auditor's Review

Statutory auditors R.H. Nisar & Co. (Firm Registration Number: 120895W) conducted a limited review of the unaudited financial results. The auditors issued an unmodified conclusion, confirming that the financial statements comply with Indian Accounting Standards and SEBI disclosure requirements.

The company operates in a single business segment of "Pharmaceutical and Healthcare," with manufacturing facilities located at Zorabian Industrial Complex, Vevoor, Palghar, and registered office at Urmi Estate, Mumbai.