Chemkart India Reports 60% Excess Utilization in General Corporate Purpose Funds

Chemkart India Limited , a nutraceuticals company, has reported a significant deviation in its fund utilization for the quarter ended September 30, 2025, according to the first Monitoring Agency Report issued by Brickwork Ratings India Private Limited.

Key Highlights

The company raised Rs 80.08 crore through Fresh Issue and Offer for Sale of Equity Shares in July 2025.
A 60.26% deviation was observed in fund utilization for General Corporate Purpose (GCP).
Rs 0.43 crore was spent on GCP against the allocated Rs 0.27 crore, resulting in an excess utilization of Rs 0.16 crore.

Fund Utilization Breakdown

Object	Amount Proposed (Rs Crore)	Amount Utilized (Rs Crore)	Unutilized Amount (Rs Crore)
Manufacturing Facility Investment	34.68	0.49	34.19
Repayment of Borrowings	20.00	20.00	0.00
General Corporate Purpose	0.27	0.43	-0.16
Issue Related Expenses	9.53	9.08	0.45

Additional Observations

Offer for Sale (OFS) Discrepancy

The company transferred Rs 13.69 crore to OFS shareholders and incurred Rs 2.20 crore in issue expenses related to OFS, totaling Rs 15.89 crore. This resulted in an additional outflow of Rs 0.29 crore above the Rs 15.60 crore specified in the Prospectus.

Unutilized Funds

Chemkart has invested the unutilized funds in various financial instruments, including liquid funds and arbitrage funds from asset management companies such as Mirae Asset, Nippon India, Tata, Aditya Birla Sun Life, HDFC, and ICICI Prudential.

Implementation Timeline

There are no reported delays in the implementation of the stated objectives. The manufacturing facility investment through the company's wholly-owned subsidiary is ongoing and expected to be completed by the financial year 2026-27.

Regulatory Compliance

The company has obtained all necessary government and statutory approvals related to the stated objectives of the fund utilization.

The Monitoring Agency Report, prepared by Brickwork Ratings, is based on the format prescribed by SEBI (ICDR) Regulations, 2018. The report aims to provide a true and fair view of the utilization of the issue proceeds in relation to the objects of the issue.

Chemkart India Limited's management and Board of Directors may need to address the deviation in fund utilization, particularly the excess spending on General Corporate Purpose. Shareholders and investors may want to monitor future reports for any additional explanations or actions taken by the company regarding this deviation.

1 Day	5 Days	1 Month	6 Months	1 Year	5 Years
-1.39%	-8.71%	-7.54%	-23.65%	-23.65%	-23.65%

Chemkart India Limited , a B2B supplier of raw ingredients for nutritional, sports, and health supplements, has reported no deviation in the utilization of its Initial Public Offering (IPO) proceeds for the half-year ended September 30, 2025. The company, which raised Rs. 64.48 crores through its IPO on July 9, 2025, has adhered to its stated objectives for fund allocation.

Fund Utilization Breakdown

According to the company's integrated disclosures under SEBI regulations:

Objective	Allocated (Rs. Crores)	Utilized (Rs. Crores)
Manufacturing facility capital expenditure through subsidiary EasyRaw Materials Private Limited	34.68	0.50
Debt repayment	20.00	20.00
General corporate purposes and IPO expenses	9.80	9.80

Chemkart has fully utilized the funds allocated for debt repayment and general corporate purposes, while the manufacturing facility capex is in its early stages.

Financial Performance H1 FY26

Chemkart India's financial results for the first half of FY2025-26 reveal a mixed performance:

Metric	H1 FY26	H1 FY25	YoY Change
Revenue from Operations	10,322.60	11,312.60	-8.75%
EBITDA	1,415.60	2,022.90	-30.02%
EBITDA Margin	13.71%	17.88%	-4.17%
Profit After Tax	1,015.30	1,563.70	-35.07%
PAT Margin	9.84%	13.82%	-3.98%

The company experienced a decline in revenue and profitability compared to the same period last year. However, there was a sequential improvement from H2 FY25, with revenue increasing by 14.50% and PAT by 14.13%.

Management Commentary

Ankit Shailesh Mehta, Chairman & Managing Director of Chemkart India, attributed the year-on-year decline to an industry-wide correction in product prices, particularly in the performance nutrition segment. He stated, "While overall quantity sold increased, revenue was impacted by the drop in average selling prices."

Mehta also highlighted that volumes of certain amino acids, including Glycine, declined due to reduced offtake from a key customer exporting to the U.S., where temporary tariff measures affected demand. However, he noted that the Glycine business has resumed from October, supported by a strong order book for the second half.

Future Outlook

The company remains optimistic about its future performance. With prices stabilizing toward the end of the half year and the reversal of pricing pressure, Chemkart expects stronger growth in the second half. The management is focusing on operational efficiency, supply-chain optimization, and product mix improvement to accelerate growth momentum.

Monitoring and Compliance

Brickworks Rating Limited serves as the monitoring agency for the fund utilization. The company, being listed on the BSE SME Platform, is exempt from disclosing related party transactions as per SEBI regulations.

As Chemkart India Limited navigates through market challenges and progresses with its expansion plans, investors will be keenly watching how effectively the company utilizes its IPO proceeds and improves its financial performance in the coming quarters.