HFCL500183Routine SEBI update

Monitoring agency: no deviation in use of QIP proceeds; Rs. 525.67 crore utilised till Q2FY27

Monitoring agency report by CARE Ratings on HFCL's use of its QIP money, for the quarter ended September 30, 2026.

By ScoutQuest · Mon 19 Oct 2026, 6:50 PM IST · 2 min read

QIP issue size: Rs. 550.00 crore
Amount utilised till Q2FY27: Rs. 525.67 crore used till Q2FY27
Unutilised amount: Rs. 24.33 crore

What has been shared

HFCL has submitted the monitoring agency report of CARE Ratings Limited on the utilisation of money raised through its Qualified Institutions Placement (QIP), for the quarter ended September 30, 2026. A monitoring agency is an independent agency appointed to check, at intervals, that money raised from investors is being spent on the purposes stated at the time of the issue.

What was raised

About Rs. 550.00 crore through the allotment of ~8.79 crore equity shares of face value Re. 1 each to qualified institutional buyers at ₹62.55 per share.
Separately, 7.5 crore warrants were allotted to persons belonging to the Promoter/Promoter Group category at ₹74 per Warrant, each convertible into an equivalent number of equity shares. The company has received ₹138.75 crore against these warrants.

How much has been used

Issue size: Rs. 550.00 crore
Used till Q2FY27: Rs. 525.67 crore
Unutilised at the end of the quarter: Rs. 24.33 crore

The objects for which the money was raised include capital expenditure towards purchase of plant and machinery for expansion of optical fibre cable, research and development initiatives including acquisition of technologies, repayment or prepayment of long-term and short-term borrowings, long-term working capital, general corporate purposes and issue expenses.

What the monitoring agency says

Deviation from the objects of the issue: No
Utilisation in line with the disclosures in the offer document: Yes
No major deviation observed over earlier monitoring agency reports
No unfavourable event affecting the viability of the objects
The unutilised amount is parked in fixed deposits with State Bank of India and in the monitoring account with SBI
The capital expenditure towards plant and machinery has been shown as completed in the quarter, with no delay

A point to note

The report records that in the previous quarter the issue proceeds were transferred from the monitoring account into the company's cash credit account, and that research and development payments were then made from that account. Because this mixed the issue proceeds with other cash flows, the agency says it could not directly ascertain those spends; it reviewed and confirmed the transactions through a management certificate and a chartered accountant's certificate.

What this means for a retail investor

The report is a periodic check on end-use of money raised from investors; here it records no deviation from the stated objects and a large part of the QIP money already spent.
The observation about proceeds sitting in the cash credit account relates to how the spending was tracked and confirmed, alongside a clean finding on deviation.

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