Morepen Labs: QIP Fund Utilization Report for Q4FY26 Shows No Deviation

Morepen Laboratories Limited has submitted its Monitoring Agency Report for the quarter ended March 31, 2026. The report, issued by Care Ratings Limited, confirms that the utilization of proceeds from the Qualified Institutions Placement (QIP) of ₹200 crore has been in accordance with the objects disclosed in the offer document.

During the fourth quarter of the fiscal year 2026, ₹1.15 crore was transferred from the monitoring account to various current accounts to facilitate local disbursements. While bank statements were reviewed, the commingling of funds prevented direct ascertainment of the end-use, leading to reliance on management representation and the Chartered Accountant's certificate. Additionally, ₹1.55 crore, representing interest income gained on debt mutual funds, was not considered part of the utilized proceeds.

For the development of medical devices at the Baddi facility, ₹41.44 crore was earmarked. By March 31, 2026, ₹27.88 crore had been utilized, leaving a balance of ₹13.56 crore. The QIP Committee, through a resolution on April 7, 2026, approved an extension for the utilization of this balance amount until March 31, 2027.

Regarding modernization and expansion of manufacturing units in Baddi and Masulkhana, an amount of ₹122.79 crore was originally proposed, with ₹109.23 crore utilized as of March 31, 2026. The funding for working capital requirements saw a slight increase from the initially proposed ₹64.36 crore to ₹66.29 crore due to lower-than-anticipated issue-related expenses, which has been approved by the QIP committee.

The report also noted that profitability has remained subdued over the last four quarters due to margin compression in the API segment, although margins showed improvement in Q3FY26. Separately, the company has received a show cause notice from the GST authorities concerning an erroneous GST refund amounting to ₹117.94 crore, but a stay has been granted by the High Court of Himachal Pradesh, making the matter sub judice.

There were no material deviations from the expenditures disclosed in the offer document, and no shareholder approval was required. The means of finance for the disclosed objects have not changed, and no major deviations were observed from earlier monitoring agency reports. The report also confirmed that all necessary government/statutory approvals related to the objects are not required as per the objects of the issue.