Laxmi Organic Industries Limited has successfully maintained complete compliance with its IPO proceeds utilization plan, reporting zero deviation for the quarter ended December 31, 2025. The chemical industry company filed its monitoring agency report under Regulation 32 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, confirming adherence to all objects stated in its March 18, 2021 prospectus.

Monitoring Agency Confirms Zero Deviation

Axis Bank Limited, serving as the monitoring agent, issued a comprehensive report validating the company's IPO proceeds deployment. The monitoring agency confirmed no deviation from the original objects and reported a 0% deviation range across all categories.

IPO Proceeds Structure and Utilization

The company's March 2021 IPO raised ₹5,000.00 million through fresh issue, with net proceeds of ₹4,843.78 million after deducting offer expenses of ₹156.22 million. The original offer expenses estimate showed savings of ₹43.58 million, which was allocated to general corporate purposes.

Strategic Deployment Across Multiple Objects

The proceeds utilization spans eight key areas, with significant allocations toward debt repayment (₹1,729.25 million) and facility expansion (₹910.63 million). The company has completed utilization for most objects, with only the YFCPL working capital investment showing partial deployment.

Key facility locations include:

• Lote, Maharashtra: YFCPL capital expenditure and working capital projects
• Mahad, Maharashtra: SI Manufacturing Facility expansion and infrastructure development

Unutilized Funds Management

The remaining ₹245.27 million in unutilized proceeds has been prudently deployed in fixed deposits to ensure capital preservation while generating returns.

Compliance and Governance Excellence

The monitoring report highlights the company's strong governance framework, with all certifications provided by chartered accountants and no unfavorable events affecting object viability. The company has obtained all necessary government and statutory approvals for its projects, demonstrating comprehensive regulatory compliance.

This zero-deviation report reinforces Laxmi Organic Industries' commitment to transparent capital deployment and adherence to investor commitments made during its public offering. The systematic utilization of IPO proceeds across strategic growth initiatives positions the company well for its expansion objectives in the chemical industry.

Laxmi Organic Industries Limited has released its unaudited financial results for the third quarter and nine months ended December 31, 2025, revealing a challenging operational environment with declining revenues and profitability metrics. The company also conducted an investor conference call on January 30, 2026, providing detailed insights into market conditions and strategic initiatives.

Financial Performance Overview

The company's standalone financial performance for Q3FY26 showed notable declines across key metrics compared to the previous year:

The consolidated results showed a similar trend, with revenue from operations declining to ₹7,186.82 million from ₹7,863.35 million in Q3FY25, representing an 8.6% decrease. EBITDA for the quarter stood at nearly ₹50 crores, down 33% compared to the previous year.

Nine-Month Performance Analysis

For the nine-month period ended December 31, 2025, the company's performance reflected sustained pressure:

Market Challenges and Business Segment Performance

During the earnings call, Managing Director and CEO Dr. Rajan Venkatesh highlighted that the global chemical industry continues to face challenges with ongoing cost optimization efforts, shutdowns, and supply chain restructuring. The company's Essentials business saw revenue decline by 6% while maintaining volumes, primarily due to acetic acid feedstock price impacts. The Specialties segment experienced a more significant 30% revenue decline attributed to price moderation (12%), absence of one-time campaign products from the previous year (5-6%), and the phaseout of agrochemical intermediates (10%).

Significant Operational Developments

The company implemented several important changes during the reporting period. A key development was the change in depreciation method from written down value to straight line method, resulting in lower depreciation expenses. Under the previous method, depreciation for Q3FY26 would have been higher by ₹288.97 million.

Additionally, Laxmi Organic reversed accrued liabilities of ₹407.27 million related to wheeling losses, wheeling charges, transmission losses and transmission charges levied by Maharashtra State Electricity Distribution Company Limited, based on a favorable order from MERC.

Project Updates and Strategic Initiatives

The Dahej facility represents the company's largest capex investment, with Phase 1 already online and Phase 2 focusing on diketene, ketene, and downstream derivatives expected to complete mechanical work by quarter-end. The company anticipates FY27 as the first year of qualification and ramp-up, with accelerated growth in FY28.

Corporate Governance and Regulatory Updates

The Board approved the re-appointment of Dr. Rajiv Banavali as an Independent Director for a second term from May 18, 2026, to May 17, 2028. The company exercised the option under Section 115BBA of the Income Tax Act to compute income tax at 25.17%, resulting in a deferred tax liability reversal of ₹97.18 million. Following new Labour Codes notification, the company recognized ₹38.02 million toward increased gratuity liability and compensated absences.

Market Outlook and Recovery Signals

Management noted early signs of improvement in key feedstock pricing, particularly acetic acid, which had declined over 20% in the past two years but recently rebounded from $320-330 levels to $360-380 range. The company expects ethyl acetate spreads to improve from the previous pain point of $90-100 to approximately $130 range. Demand signals from packaging, inks and adhesives remained stable, while agrochemicals showed moderate demand and pharmaceuticals remained stable.

Source: Earnings call transcript and financial results