Medicamen Biotech Ltd Forensic Report - SOIC x StockScans Report

as of Sep 2026

Medicamen Biotech's record is mixed: revenue is export-heavy and growing, but cash conversion is persistently negative as receivables absorb the sales growth. Related-party dealings with holding company Shivalik Rasayan breached approved limits in FY2025-26, drawing secretarial auditor and stock-exchange compliance findings, while the company seeks shareholder approval for ₹30 crore of annual purchases going forward. The same auditor firm and signing partner have served for at least nine consecutive years, with a second five-year term approved in 2022 running to 2027; no auditor resignation, rotation, or regulatory action against the auditor appears in the record. Regulator actions are minor fines for disclosure and governance lapses, but the company's own secretarial auditor has flagged repeated non-compliances in 2025-26, including excess related party transactions with Shivalik Rasayan Limited. Promoter and board conduct is routine, with no pledge, no ESOPs, nil executive-director pay in earlier years, and only modest open-market promoter-group churn; the one notable shift is Ashwani Kumar Sharma's redesignation from Non-Executive to Whole-Time Director in August 2025. The structure is a simple two-subsidiary arrangement with one dormant Australian shell and one small domestic unit; no layering, off-balance-sheet vehicles, or control mismatches.

Key findings

  1. Related-party dealings with holding company Shivalik Rasayan breached approved limits in FY2025-26, drawing secretarial auditor and stock-exchange compliance findings, while the company seeks shareholder approval for ₹30 crore of annual purchases going forward Major - The secretarial auditor reported that omnibus approval for related party transactions with Shivalik Rasayan Limited up to ₹10 Crores for 2025-26 was granted on 30 May 2025, but the audited balance sheet showed aggregate value exceeded the approved limit by ₹1.95 Crores, resulting in non-compliance with Section 177(4)(iv) read with Rule 6A, Section 188, and Regulation 23 of SEBI (LODR). The Corporate Governance compliance certificate issued by AMJ & Associates on 14 August 2026 noted excess related party transactions with Shivalik Rasayan Limited for purchase of goods/services without prior Audit Committee/Board approval, constituting non-compliance with Section 177(4)(iv), Section 188, and Regulation 23 of SEBI LODR. The company sought shareholder approval for material related party transactions with Shivalik Rasayan Limited (Holding Company) for procurement of APIs, R&D support, technical support, product development, and process optimisation, with aggregate amount not exceeding ₹30,00,00,000 (₹30 crores) from the date of member approval until the next AGM or one year, whichever is earlier. The company also sought shareholder approval for material related party transactions with Medicamen Life Sciences Private Limited (Subsidiary), with aggregate value expected to exceed the materiality threshold under Regulation 23 of SEBI Listing Regulations. Form AOC-2 for FY2025-26 stated that no contracts/arrangements were not at arm's length basis during the year, and all related party transactions were at arm's length with appropriate approvals. The Independent Auditor's Report on the standalone financial statements for FY2025-26 stated the company made an investment in Medicamen Life Sciences Private Limited and granted an advance of Rs. 2.80 crore (approx).
  2. Revenue is export-heavy and growing, but cash conversion is persistently negative as receivables absorb the sales growth Major - Persistent negative cash conversion over eight years (cumulative CFO/PAT of -0.22x) with rising receivable days from 112 to 155 and CFO of -₹33.17 crore against PAT of ₹9.80 crore in the latest year indicates a structural earnings-quality problem. Exports contribute 80% of total turnover in FY2025-26, up from 70% in FY2023-24, with customers in more than 30 countries. Revenue grew from ₹115cr in FY2021-22 to ₹203cr in the latest year, while cumulative CFO over the 8-year window is ₹-20cr against cumulative PAT of ₹93cr (cumulative CFO/PAT of -0.22x). Receivable days rose from 112 in FY2023-24 to 151 in FY2025-26 and 155 in FY2024-25. FY2025-26 CFO was ₹-33.17cr against PAT of ₹9.80cr (CFO/PAT of -3.38x), following ₹-8.16cr against ₹6.56cr in FY2024-25 and ₹-6.74cr against ₹9.49cr in FY2023-24. Cumulative CFO/EBITDA over 8 years was -0.13x (ΣCFO ₹-20 crore / Σ operating profit ₹158 crore). FY26 ROCE was 4.79%, FY25 ROCE was 5.29%, and FY24 ROCE was 7.35%. FY25 FCF was ₹-10.35 crore and FY24 FCF was ₹-13.03 crore.
  3. Same auditor firm and signing partner for at least nine consecutive years, with a second five-year term approved in 2022 running to 2027; no auditor resignation, rotation, or regulatory action against the auditor appears in the record Minor - The same auditor and signing partner for nine consecutive years with a second term approved through 2027 is a governance concern but not a violation, and no regulatory action or resignation appears in the record. Rai Qimat & Associates (Firm Regn. No. 013152C) has been the statutory auditor of Medicamen Biotech Ltd since at least the 24th AGM held on September 13, 2017, when it was appointed for five consecutive years through the 29th AGM in 2022. The Board of Directors, based on Audit Committee recommendation at its meeting held May 25, 2022, reappointed Rai Qimat & Associates for a second term of five consecutive years from the conclusion of the 29th AGM until the conclusion of the 34th AGM in 2027. CA Qimat Rai Garg (Membership No. 080857) signed as the engagement partner for Rai Qimat & Associates on the standalone and consolidated audit reports for every year from FY2019-20 through FY2025-26, with report dates of June 30, 2020, June 26, 2021, May 29, 2023, May 29, 2024, May 30, 2025, and May 27, 2026. The Independent Auditor's Report for FY2025-26 states that there was no resignation of the statutory auditor during the year. Total fees paid to statutory auditors (M/s Rai Qimat & Associates) and network entities for FY2021-22 were ₹2,750 crore (plus taxes and out-of-pocket expenses).
  4. Regulator actions are minor fines for disclosure and governance lapses, but the company's own secretarial auditor has flagged repeated non-compliances in 2025-26, including excess related party transactions with Shivalik Rasayan Limited Minor - Regulatory actions are limited to small fines for disclosure lapses, and while the secretarial auditor flagged multiple non-compliances (POSH, CSR calculation, governance report inaccuracies), these are procedural rather than fraud-related. NSE imposed a fine of ₹7,080 on Medicamen Biotech Ltd for a 3-day delay in filing the shareholding pattern for the quarter ended 30 June 2025; the delay was regularised and the fine duly paid. BSE and NSE imposed fines totalling ₹1,10,920 on 27 May 2026 for non-compliant composition of the Nomination and Remuneration Committee from 13 February 2026 due to inclusion of an Executive (Non-Independent) Director. The secretarial auditor observed inaccuracies in records/documents and Corporate Governance Reports filed with stock exchanges, including mismatches between attendance/quorum disclosed and Minutes of Board/Committee meetings during 2025-26. The secretarial auditor observed that Corporate Governance Reports for quarters ended 31 March 2025 and 30 June 2025 omitted the Stakeholders' Relationship Committee meeting held 22 January 2025, and reports for quarters ended 30 June 2025 and 30 September 2025 incorrectly recorded attendance of two Independent Directors at CSR Committee meetings held 30 May 2025 and 12 August 2025. The secretarial auditor observed non-compliance with the POSH Act, failure to form an Internal Committee and non-submission of the Annual Report for the calendar year ended 31 December 2025. The secretarial auditor observed that CSR budget allocation was calculated on PAT instead of PBT, deviating from Section 135 read with Section 198, resulting in a shortfall in mandatory CSR expenditure. The Ministry of Corporate Affairs issued a notice under Section 233B of the Companies Act, 1956 to the Company and its whole-time directors for non-filing of the Cost Audit Report for FY2014-2015; the report was already filed with MCA vide SRN No. G11417086 dated 15.09.2016, and the Company was in process of compounding the matter with applications filed with the revenue department pending processing.
  5. Promoter and board conduct is routine, with no pledge, no ESOPs, nil executive-director pay in earlier years, and only modest open-market promoter-group churn; the one notable shift is Ashwani Kumar Sharma's redesignation from Non-Executive to Whole-Time Director in August 2025 Minor - Promoter and board conduct is routine with no pledge, no ESOPs, and modest churn; the redesignation of a director and preferential allotments are disclosed and approved, presenting no material concern. Promoter shareholding stood at 40.46% as of the latest year, unchanged from one year earlier, with pledge at 0.00% both currently and one year ago. Promoter Shivalik Rasayan Limited declared on 08.04.2025 under Regulation 31(4) of SEBI SAST that no encumbrance was made on its 5,487,095 equity shares in Medicamen Biotech Limited during FY2024-25. Total managerial remuneration paid during FY2025-26 was ₹86.69 lakhs, up from ₹79.84 lakhs in FY2024-25, stated to be within limits under Section 197 read with Schedule V of the Companies Act, 2013. Mr. Ashwani Kumar Sharma's designation changed from Non-Executive Director to Whole-Time Director effective August 12, 2025, for a term of five years, approved by members at the 32nd AGM. Remuneration paid to Executive Directors during FY2022-23 was NIL. A preferential allotment of 6,50,000 fully convertible warrants at ₹530 per warrant (premium ₹520), aggregating ₹34,45,00,000, was approved by the Board on 24 April 2025 to Promoter & Promoter Group and Non-Promoter category, convertible within 18 months. A preferential allotment of 8,48,215 equity shares at ₹530 per share (premium ₹520), aggregating ₹44,95,53,950, was approved by the Board on 24 April 2025 to the Non-Promoter category. Independent Directors Harish Pande (DIN 01575625) and Arun Kumar (DIN 07031730) ceased to be Independent Directors and Committee members effective February 13, 2026, at term conclusion.
  6. A simple two-subsidiary structure with one dormant Australian shell and one small domestic unit; no layering, off-B/S vehicles, or control mismatches Clean - The two-subsidiary structure is simple and transparent with one dormant Australian shell and one small domestic unit, with no layering, off-balance-sheet vehicles, or control mismatches. As at 31 March 2026, the Company had 2 subsidiaries with no addition or cessation during FY2025-26. Opal Pharmaceuticals Pty. Ltd., Australia (wholly owned subsidiary) had total assets of AUD 86,749.08 (₹50.93 Lakhs) and net worth of AUD 85,249.09 (₹50.05 Lakhs) as on 31 March 2026, with no significant business activities during the year. Medicamen Life Sciences Private Limited was incorporated on August 12, 2022 and reported turnover of ₹6.92 crores for FY2023-24. Opal Pharmaceuticals Pty Ltd was acquired in September 2019 as a wholly owned subsidiary for consideration aggregating up to AUD 4,20,000. The wholly owned subsidiary Opal Pharmaceuticals Pty Ltd reported a loss after taxation of AUD 76,557.72 for the year ended March 31, 2023, with a reporting period differing from the holding company (July to June). The Company had no associate companies or joint ventures as of March 31, 2023. No material subsidiary existed as of 31 March 2026, and no material unlisted subsidiary existed as of FY2023-24.

What to watch

Bottom line: This is a disclosed and audited record with a clean subsidiary structure and routine promoter conduct, but the earnings quality is the central issue: cash conversion has been negative for eight straight years, and receivables keep absorbing the export-led growth. The related-party breach with the holding company is a compliance failure that the company is now seeking to cure with a larger shareholder-approved limit, and the long-tenured auditor with no rotation adds a governance overhang. The risk sits in the cash cycle and the related-party channel, so watch the FY2026-27 receivable days, the CFO trend, and whether the ₹30 crore Shivalik Rasayan limit is respected.