Regaal Resources Limited disclosed receiving a notice from the Joint Commissioner of State Tax, Kishanganj Circle for recovery of Rs 149.00 crore related to wrong SGST subsidy reimbursement, even as the company reported strong quarterly financial performance with 25.55% revenue growth.

Regulatory Notice Details

The company received a notice regarding 'Notice for recovery of wrong reimbursement' from the Office of the Joint Commissioner of State Tax, Kishanganj Circle. The notice pertains to subsidy claimed under the Bihar Industrial Promotion Policy, 2016/2011 from April 2019 to December 2024.

According to the notice, certain distributors utilized SGST credits inappropriately for IGST payments on interstate sales, which violates Resolution No.108 dated January 20, 2020 issued by the Department of Industries.

Financial Performance Overview

Despite regulatory challenges, the company demonstrated robust operational performance in Q3FY26. Revenue from operations reached Rs 3,229.70 million, marking a substantial increase of 25.55% compared to Rs 2,572.28 million in Q3FY25.

Impact Assessment and Recovery Strategy

Based on current assessment, the company expects to recover Rs 104.64 million from concerned distributors due to breach of agreement clauses regarding SGST credit utilization. The balance amount, including pending subsidy till December 31, 2025, totaling Rs 66.57 million has been provided as an exceptional item in Q3FY26 financial results.

Nine-Month Performance and IPO Proceeds

For the nine-month period ended December 31, 2025, the company maintained strong momentum with revenue from operations of Rs 8,895.62 million compared to Rs 6,566.23 million in the corresponding period, representing growth of 35.47%. Net profit for the nine-month period stood at Rs 390.25 million.

The company has substantially utilized its IPO proceeds raised in August 2025, with Rs 1,857.31 million deployed out of Rs 1,871.40 million allocated for debt repayment and general corporate purposes.

Legal Response Strategy

Regaal Resources stated it is examining the notice and will take appropriate legal steps, including filing replies and appeals as advised. The company disclosed this information in compliance with SEBI Listing Regulations under Regulation 30 read with Para B of Part A of Schedule III.

Regaal Resources Limited recently faced a search operation conducted by the Directorate General of GST Intelligence (DGGI). The company has provided clarification regarding the outcome of this investigation and its subsequent actions.

Search Operation Details

The DGGI conducted a search operation at Regaal Resources as part of its regulatory oversight activities. Such operations are typically undertaken by tax authorities to verify compliance with GST regulations and investigate potential discrepancies in tax filings.

Company's Response and Outcome

Following the search operation, Regaal Resources has confirmed that no formal order or penalty was imposed against the company by the DGGI. This indicates that the investigation did not result in any punitive measures or legal sanctions.

Voluntary Tax Payment

Despite the absence of any formal orders or penalties, Regaal Resources proactively made a voluntary tax payment of ₹8.90 million. This voluntary payment demonstrates the company's commitment to maintaining transparency and ensuring full compliance with tax regulations.

Regulatory Compliance

The company's decision to make a voluntary payment following the DGGI search operation reflects its approach toward regulatory compliance. By addressing any potential tax obligations voluntarily, Regaal Resources has taken steps to maintain its standing with tax authorities and ensure adherence to GST requirements.