Fredun Pharmaceuticals Ltd Forensic Report - SOIC x StockScans Report

as of Jul 2026

Fredun Pharmaceuticals carries a seven-year streak of unqualified audit opinions, yet the record is marked by a preferential issue where the monitoring agency lost visibility on fund use, and a ₹600 crore loan-authorisation request that sits alongside a filing stating there are no material contracts at arm’s length requiring disclosure and no contracts not at arm’s length.

Key findings

  1. Operating cash flow is weak, and the monitoring agency flagged deviations in preferential issue fund utilisation Major - Consolidated profit after tax was ₹32.62 Crore in FY2025-26 but operating cash flow was only ₹11.90 Crore, a CFO/PAT ratio of 0.36x; in FY2024-25, operating cash flow was negative ₹16.60 Crore against a profit of ₹19.74 Crore. For the quarter ended 31 December 2025, the monitoring agency CARE Ratings reported a 25-50% deviation in utilisation of the ₹97.78 Crore preferential issue proceeds, including ₹37 Crore temporarily parked in the Cash Credit Account before being transferred to Current Accounts. For the quarter ended 31 March 2026, CARE Ratings stated it was unable to comment on the deviation due to missing supporting documents and certificates.
  2. BSE imposed a ₹3.61 Crore fine for multi-year LODR violations, which the company is contesting Major - BSE Ltd. imposed a fine of ₹3,61,75,260 (including GST) on 23 March 2023 for non-compliance with LODR provisions during FY2020, FY2021 and FY2022. The company filed a Waiver Application contesting the fine, and as of the FY2022-23 report date, a reply from BSE was awaited. Stock exchanges imposed additional fines of ₹9,67,280 during FY2023-24 for further LODR delays, including late applications for trading of shares.
  3. Board seeks ₹600 crore borrowing, loan, and guarantee limits for FY2026-27 Major - The Board seeks shareholder approval for separate resolutions to raise borrowing limits under Section 180(1)(c) and to authorise loans, guarantees, or security under Section 185, each up to ₹600 crore for FY2026-27. A prior shareholder resolution from FY2022-23 had set these limits at ₹200 crore. The company’s Form AOC-2 for FY2025-26 states there are no contracts or arrangements not at arm’s length and no material contracts at arm’s length requiring disclosure.
  4. Overdue receivables are rising while operating cash flow lags reported profit Minor - Trade receivables considered good rose from 34.56 crore as at 31 March 2023 to 64.85 crore as at 31 March 2024. Receivables outstanding for more than three years from their due date increased from ₹16.31 lakh to 1.59 crore over the same period. Management guided for FY27 top-line growth of 25-30% and stated the company holds orders in hand upwards of ₹320-330 crores.
  5. Promoter family holds board and management control across three generations Minor - The board is chaired by Dr. Daulat Medhora, wife of the founder and mother of Managing Director & CFO Fredun Medhora; all three held equity shares throughout the review period. At the EGM on 18 January 2024, resolutions to re-appoint both Mr. Fredun Medhora and Dr. Daulat Medhora received 100% of votes polled in favour, with public non-institutions casting only 22,736 votes, or 1.01% of their holding. Promoter shareholding declined from 50.38% as at 30 June 2023 to 44.57% by 15 April 2026, and all promoter shares have been reported as non-encumbered since 30 June 2022.
  6. A three-tier subsidiary chain was created within two fiscal years, and the step-down subsidiary reported a loss in its first year Minor - From FY2019-20 through FY2023-24, the company had no subsidiaries. Wholly owned subsidiary Fredun Retail Private Limited was incorporated in FY2024-25 and acquired One Pet Stop Private Limited on 27 March 2025; One Pet Stop reported a net loss of 1.73 crore for the year ended 31 March 2025. A further step-down subsidiary, Wagr Retail Private Limited, was incorporated on 22 December 2025.
  7. The incoming statutory auditor operates under two different registration numbers in the same annual report Minor - R.H. Nisar & Co. was appointed as statutory auditor at the 36th AGM after the outgoing firm completed its maximum term. In the FY2025-26 Annual Report, the Board’s Report states the firm’s registration number as 103659. The same dual-registration discrepancy appears in the FY2024-25 Annual Report, where the Board’s Report uses FRN 103659.

What to watch

Bottom line: This is a disclosed record with a clean audit trail, but the compliance machinery shows repeated slippage, IEPF transfers overdue across three years, a CSR statement contradicted by its own table, and a monitoring agency that lost sight of preferential issue funds. The ₹600 crore loan-authorisation request sits in tension with a filing that reports no material related-party transactions, and that tension is where the reader’s attention belongs. Watch the IEPF transfers, the preferential issue documentation, and the deployment of the loan and guarantee limit.