Please find enclosed herewith the statement of deviation/variation in the utilization of funds for the quarter ended on 31st December, 2025.
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Awaiting price reaction for this filing.
Apollo Ingredients Ltd raised Rs. 5 crore through a Rights Issue on 12 August 2025, intended mainly for working capital (Rs. 3.65 crore for raw materials, trade receivables, inventory) and issue expenses (Rs. 30 lakhs). The company has reported a deviation: Rs. 3 crore of the working capital allocation was instead used to pay advance lease rent for 10 years on a factory taken on lease from a related party, Apollo Ingredients India Private Limited. While shareholder approval for the related party lease transaction was obtained at the 45th AGM on 27 September 2025, no specific approval was taken to change the stated object of the issue. The Monitoring Agency (Infomerics Valuation and Rating) flagged this as a deviation from the objects stated in the Letter of Offer. The audit committee and board have noted the observation.
This is a negative governance signal — the company used public issue proceeds for a purpose different from what was promised to investors, even though linked to a related party. Shareholders may view this as a red flag on capital allocation discipline and related-party dealings, which could weigh on the stock and invite closer regulatory scrutiny.