SK Minerals uses Rs 32.71 crore for loans and customs duty

SK Minerals & Additives Limited used Rs 32.71 crore of preferential-warrant proceeds in the quarter ended September 30, 2026, chiefly to repay working-capital loans, while its full Rs 185.36 crore allocation for organic and inorganic growth remained unused, according to the monitoring report issued by Crisil Ratings Limited on November 6, 2026.

How did SK Minerals use the warrant proceeds?

SK Minerals used the entire Rs 32.71 crore revised allocation for general corporate purpose during the quarter ended September 30, 2026. Of this, Rs 31.76 crore repaid working-capital limits at Union Bank of India and Kotak Mahindra Bank, while Rs 94.81 lakh paid customs duty on imported raw materials or finished goods.

Crisil Ratings reported that the deployment matched the stated objects of the preferential issue. Its assessment drew on management’s undertaking, bank statements, the statutory auditors’ certificate dated October 7, 2026, and the notice to shareholders dated June 17, 2026.

The deployment split shows that general corporate purpose was fully used, whereas both growth categories recorded nil use in the September 2026 quarter. The Rs 185.36 crore unspent expansion allocation comprised Rs 25 crore for organic growth and Rs 160.36 crore for inorganic growth.

Why was SK Minerals' growth allocation unspent?

SK Minerals had spent none of the Rs 185.36 crore allocated to expansion and growth by September 30, 2026. Crisil Ratings recorded “no utilization during the reported quarter” against both the Rs 25 crore organic-growth object and the Rs 160.36 crore inorganic-growth object.

The report did not classify this as an implementation delay. Its delay table marked the planned completion date, actual delay, reason for delay and proposed course of action as not applicable, while SK Minerals' Regulation 32 filing also reported no deviation or variation in the use of preferential-issue proceeds.

The revised expansion allocation was marginally below the original plan because convertible warrants were undersubscribed at allotment on August 24, 2026. The total issue size fell by Rs 27.79 lakh, from Rs 218.35 crore to Rs 218.07 crore, and the reduction was adjusted across expansion and general corporate purpose.

How much warrant consideration has SK Minerals received?

SK Minerals had received Rs 54.52 crore, representing 25% of the Rs 218.07 crore revised warrant issue, by September 30, 2026. The initial payment was made on subscription and allotment of the convertible warrants on August 24, 2026, rather than the full consideration being paid upfront.

After the Rs 32.71 crore general-corporate-purpose deployment, the monitoring report showed Rs 21.81 crore of unutilised principal proceeds. This was held in the monitoring account and fixed deposits, while the deployment schedule showed Rs 21.89 crore including Rs 7.84 lakh of fixed-deposit interest.

The remaining Rs 163.55 crore was yet to be received from warrant holders at September 30, 2026. Under the disclosed terms, holders must pay the remaining 75% when converting warrants into equity shares, with conversion permitted in one or more tranches within 18 months of the August 24, 2026 allotment.

Where did SK Minerals place its unspent received proceeds?

SK Minerals placed the unspent received proceeds in Union Bank of India fixed deposits and its monitoring account as of September 30, 2026. The investments and account totalled Rs 21.89 crore including Rs 7.84 lakh of accrued fixed-deposit interest, according to Crisil Ratings' deployment schedule.

Six fixed deposits totalling Rs 15 crore mature on December 16, 2027 and carry a stated return of 6.50%. Four deposits totalling Rs 9.38 crore mature on December 29, 2026 at 4.30%, while Rs 1.06 lakh was held in SK Minerals' Union Bank of India monitoring account.

The deposit schedule reported total earnings of Rs 70,000 as at September 30, 2026, resulting in an aggregate listed market value of Rs 21.89 crore. These instruments relate only to received but unspent proceeds and do not represent payment of the Rs 163.55 crore still due from warrant subscribers.

What did Crisil Ratings report about deviations?

Crisil Ratings reported no deviation from the preferential issue's stated objects for the quarter ended September 30, 2026. It also reported no change in the means of finance, no major deviation from earlier monitoring reports, and no favourable or unfavourable event affecting the viability of the disclosed objects.

The monitoring agency said all utilisation was in line with the offer document, but also stated that it does not perform an audit or statutory verification of the information and certifications it receives. Its report relied on issuer-provided material and the October 7, 2026 statutory auditors’ certificate, and did not constitute an investment opinion.

The Rs 32.71 crore general-corporate-purpose allocation was below the 25% limit referenced in the offer documents, which was stated as Rs 54.52 crore of issue proceeds. Its recorded use was limited to Rs 31.76 crore of working-capital loan repayment and Rs 94.81 lakh of customs-duty payment.

Conclusion

SK Minerals' September 2026 warrant-proceeds deployment focused on working-capital obligations and customs duty rather than its expansion objectives. The company fully used its Rs 32.71 crore general-corporate-purpose allocation, while the Rs 185.36 crore planned for organic and inorganic growth had no recorded expenditure by the quarter end.

The next disclosed milestone is warrant conversion within 18 months of the August 24, 2026 allotment, when Rs 163.55 crore of outstanding consideration may become payable by holders. Subsequent monitoring reports can show whether that consideration is received and whether SK Minerals begins using the Rs 25 crore organic-growth and Rs 160.36 crore inorganic-growth allocations.