Report of the Monitoring Agency with respect to utilization of proceeds raised through QIP by Azad Engineering Limited.
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Azad Engineering had raised ₹700 crore through a Qualified Institutions Placement (QIP) in February-March 2025, earmarked for capital expenditure (₹525 cr), general corporate purposes (₹156.21 cr), and issue expenses (₹18.79 cr). CARE Ratings, the monitoring agency, reports that as of June 30, 2025, the company has utilised ₹202.83 crore in total, with ₹76.64 cr spent on capex, ₹76.41 cr on general corporate purposes (salaries, vendors, and other expenses), and ₹4.70 cr on issue expenses during the quarter. The remaining ₹497.17 crore of unutilised proceeds is parked in fixed deposits with HDFC Bank, ICICI Bank, and Yes Bank, plus balances in monitoring and escrow accounts, earning returns between 0.20% and 3.75%. No deviations from the stated objects were observed, and all required statutory approvals are in place. The audit committee reviewed and noted the report on August 4, 2025.
Shareholders can take comfort that QIP funds are being deployed in line with disclosed purposes with no deviations reported. However, only about 29% of the ₹700 crore has been utilised in the first full quarter post-issue, which is normal for a capex-heavy plan spread over two fiscal years, though investors will track timely execution of the planned capital expenditure.