Monitoring agency report flags IPO proceeds deviation up to 10%; no shareholder approval

Monitoring Agency Report by India Ratings & Research on the use of Sai Parenterals' IPO proceeds for the quarter ended 30 June 2026.

Sat 3 Oct 2026

Deviation from issue proceeds

INR 238.74 million

Range of deviation

up to 10%

Shareholder approval for material deviations

No

Commingled with other funds

INR 149.21 million routed through accounts where issue proceeds were commingled with other funds

Escrow payment to BRLM

INR 100.00 million paid from the escrow account to BRLM without supporting invoices/agreement

India Ratings & Research Private Limited, appointed as the Monitoring Agency, has issued its report on the utilisation of Sai Parenterals' IPO proceeds for the quarter ended 30 June 2026.

Deviation from the objects

• The report records deviation from the objects as Yes, with a range of deviation of up to 10% and deviation from issue proceeds amounting to INR 238.74 million.
• It also records that utilisation was not as per the disclosures in the Offer Document, and that shareholder approval for material deviations was not obtained.

What the notes flag

• Note 1: Funds aggregating to INR 14.25 million were transferred from the Monitoring Account to other CC/CA for Object 1 – Capacity Expansion and utilised for the same. Since the entire amount was not utilised on the same day, this has been treated as a deviation. The agency's stated view is that any fund transferred from the Monitoring Account to the Cash Credit Account that remains unutilised on the date of transfer continues to be treated as unutilised issue proceeds, resulting in a negative balance, which is not in line with the regulatory requirements.
• Note 2: The Company utilised INR 136.54 million towards Object 3 – repayment of borrowings, which includes INR 1.28 million paid towards interest. As payment of interest is not covered under the object disclosed in the Prospectus, this has been treated as a deviation.
• Note 3: Issue proceeds aggregating to INR 189.91 million were transferred from the Monitoring Account to its Current Account / Cash Credit Account for Object 6 – general corporate purposes. Of this, utilisation of INR 149.21 million was routed through common operating accounts where issue proceeds were commingled with other operational funds, so the agency could not independently ascertain the end utilisation against the specific objects. The Company provided identified utilisation entries for the entire amount transferred from the Monitoring Account. Break-up: INR 44.15 million relates to transactions executed after 30 June 2026; INR 58.90 million was mapped to bank accounts which had not received issue proceeds; INR 46.16 million was not paid or utilised on the same day of transfer. The full INR 149.21 million has been treated as deviation.
• Note 4: Issue related expenses include reimbursement of INR 124.40 million against expenses incurred and paid by the Company's internal/own funds; INR 4.28 million of this was identified as utilised after 30 June 2026 and treated as a deviation. Separately, INR 100.00 million was paid in aggregate from the escrow account to Arihant Capital Markets Limited (BRLM) — INR 69.72 million for the fresh issue portion and INR 30.28 million for the offer for sale portion — not supported by invoices/agreement, and treated as a deviation. The Company represented, supported by email confirmations, that the amount was a refundable security deposit towards IPO-related expenses and was subsequently refunded after the reporting period.

Shareholder approval

• Against the point on whether shareholder approval has been obtained in case of material deviations from expenditures disclosed in the Offer Document, the report records No. The agency comments that the Company has utilised issue proceeds in a manner that deviates from the objects stated in the Prospectus, without obtaining the requisite shareholders' approval.

Other observations in the report

• The agency states that the Company delayed in submitting the required documents and clarifications related to utilisation of issue proceeds for the quarter ended 30 June 2026, and it disclaims responsibility and liability arising out of such breach of regulatory timelines, including delayed submission of the MA Report to relevant regulatory authorities.
• The report also refers to a delay in implementation of the objects.
• The Board of Directors has provided its comments on the report, and the agency states that those sections have not been reviewed by it.

Background of the issue

• The IPO was of 72,70,408 equity shares of face value ₹ 5 each at ₹ 392 per equity share.
• The fresh issue size was INR 2,850 Million. The issue also consisted of an offer for sale of INR 1,237.89 Mn, aggregating to a total issue size of INR 4,087.89 Mn.

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