ZR2 Bioenergy Limited has received a Monitoring Agency Report from Crisil Ratings for the quarter ended June 30, 2026. The report highlights a deviation in the deployment of unutilized preferential issue proceeds, specifically a short-term deposit with M/s Sukhmehar Finance Private Limited, a non-deposit taking NBFC. Crisil notes this deployment has continued for over 18 months without subsequent Board approval, potentially impacting future fund availability for stated objectives.
Monitoring Agency Report Highlights Fund Deployment Concern
ZR2 Bioenergy Limited (formerly known as Gujchem Distillers India Limited) has submitted its Monitoring Agency Report for the quarter ended June 30, 2026, prepared by Crisil Ratings Limited. The report, submitted to BSE Limited, addresses the utilization of proceeds raised through a preferential issue.
Key Observations and Deviations
A significant observation from the report pertains to the deployment of ₹18.50 crore in unutilized issue proceeds. During the quarter ended December 31, 2024, the company placed these funds via a short-term deposit arrangement with M/s Sukhmehar Finance Private Limited. Crisil notes that this entity is a non-deposit taking NBFC and that this deployment strategy varies from prevailing industry practices of investing in low-risk liquid instruments.
Extended Deployment Without Approval
The report further states that while the arrangement was approved by the Board on December 18, 2024, the deployment has continued for over 18 months as of June 2026. Importantly, no subsequent Board approval for the continuation of this arrangement has been provided to the Monitoring Agency. Crisil flags this extended deployment as having potential implications for the future availability of funds for the stated objectives of the issue.
Status of Other Objects
Regarding other objects:
- The repayment of existing Un-Secured Loan amounting to ₹22.00 crore has been fully utilized.
- Acquiring a running biorefinery asset and its expansion, originally budgeted at ₹180.00 crore, has seen a revised cost of ₹79.35 crore.
- Working Capital & General Corporate Purposes (GCP), with an original cost of ₹46.77 crore, has a revised cost of ₹21.05 crore.
The total revised cost of objects stands at ₹122.40 crore, a significant reduction from the initial ₹248.77 crore due to the forfeiture of warrant subscription amounts and non-participation by some allottees.
No Utilization for GCP in Reported Quarter
For the quarter ended June 30, 2026, the utilization for the ‘Acquiring a running biorefinery asset’ and ‘Working Capital and GCP’ categories showed Nil Utilisation. The company has obtained Board approval to extend the utilization period for General Corporate Purposes up to April 2027, with ₹2.55 crore utilized to date out of the earmarked ₹21.05 crore.
Source: BSE
