Shri Ahimsa Naturals IPO Update: CARE Ratings Reports No Deviation in IPO Fund Utilisation, Project Timeline Extended
Shri Ahimsa Naturals Limited has submitted its Monitoring Agency Report for the quarter ended June 30, 2026, confirming that there has been no deviation in the utilization of IPO proceeds allocated for its expansion project. However, the company acknowledged a delay in project implementation after extending the completion timeline for its new manufacturing facility to March 31, 2027.
The report, issued by CARE Ratings Limited under SEBI regulations, provides investors with an update on the utilization of funds raised through the company’s ₹50.02 crore SME Initial Public Offering (IPO).
CARE Ratings Confirms No Deviation in IPO Fund Usage
The monitoring agency reported that:
- No deviation was observed from the stated objectives of the IPO.
- The range of deviation was not applicable.
- There were no changes in the financing structure of the project.
- No material deviations were reported compared to previous monitoring reports.
This indicates that while execution has been delayed, the company continues to utilize the IPO proceeds in line with the approved objectives.
Purpose of the IPO Funds
A major portion of the IPO proceeds—₹35 crore—was earmarked for investment in the company’s wholly owned subsidiary, Shri Ahimsa Healthcare Private Limited (SAHPL).
The investment is intended to establish a new manufacturing facility at Sawarda, Jaipur, Rajasthan, which will support the company’s future production expansion.
IPO Fund Utilisation Status
As of June 30, 2026, the utilization status stood as follows:
| Particulars | Amount (₹ Crore) |
|---|---|
| Total Allocation for Manufacturing Project | 35.00 |
| Utilised up to Beginning of Q1 FY27 | 25.00 |
| Utilised During Q1 FY27 | 0.00 |
| Total Utilised till June 30, 2026 | 25.00 |
| Unutilised Balance | 10.00 |
The report notes that no end utilization of IPO proceeds occurred during Q1 FY27.
Why Was There No Utilisation During Q1 FY27?
During the quarter, the company transferred ₹5 crore from matured fixed deposits to the share application account of its subsidiary, SAHPL.
The funds are intended for the proposed issuance of 0.001% Optionally Convertible Redeemable Preference Shares (OCRPS).
However, since the shares had not yet been issued by June 30, 2026, the funds remained parked in the subsidiary’s account and were not considered end utilization of the IPO proceeds.
Delay in Manufacturing Project
Although the project remains active, CARE Ratings highlighted that implementation has been delayed.
Originally, the manufacturing facility was expected to be completed by March 2026.
The company subsequently received Board approval on January 13, 2026, extending the completion timeline to March 31, 2027.
According to the monitoring agency, the delay means the anticipated financial benefits from the project will also be deferred.
Expansion of Project Scope
The report also revealed that the company has expanded the scope of the manufacturing project.
The revised plan now includes the production of additional products, resulting in:
- Higher overall project costs
- Extended implementation timeline
- Broader manufacturing capabilities
Management believes the expanded project will strengthen long-term growth despite the temporary delay.
Government Approvals Update
CARE Ratings stated that:
- Several required statutory approvals have already been obtained.
- Additional approvals will be secured as needed during project execution.
- No new approvals were received during Q1 FY27.
Deployment of Unutilised Funds
Pending project execution, the remaining IPO proceeds continue to earn returns.
As of June 30, 2026, the unutilised funds were deployed as follows:
| Investment | Amount (₹ Crore) |
|---|---|
| Fixed Deposits with Canara Bank | 5.00 |
| Share Application Account of SAHPL | 5.00 |
| Total Unutilised Funds | 10.00 |
The fixed deposits are currently earning approximately 7.30% annual interest, allowing the company to generate income while preserving capital until deployment.
Monitoring Agency’s Observations
CARE Ratings highlighted several key observations:
- No misuse or diversion of IPO proceeds.
- No material deviation from IPO objectives.
- Delay in implementation due to revised project schedule.
- Expanded project scope has increased overall execution time and project cost.
- Utilisation remains aligned with SEBI disclosure requirements.
What This Means for Investors
The monitoring report provides reassurance that the company has maintained compliance with the objectives outlined in its IPO prospectus.
While the manufacturing project has experienced delays, the extension has been formally approved by the Board, and the remaining funds continue to be safely invested until required.
Investors should monitor future quarterly updates to track:
- Progress of the Sawarda manufacturing facility
- Utilisation of the remaining ₹10 crore
- Completion of the OCRPS issuance
- Commercial commissioning of the expanded manufacturing project