Monitoring Agency Reports on the utilisation of proceeds raised through Qualified Institutions Placements for the Quarter ended March 31, 2026
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HFCL submitted two Monitoring Agency Reports from CARE Ratings covering two Qualified Institutions Placements. The first QIP (Rs. 352 crore, August 2023) has been fully deployed across capital expenditure, R&D, borrowings repayment, working capital, and general corporate purposes. However, capital expenditure was delayed by 8 months due to weak optical fiber cable market conditions, requiring timeline extension approval from the Board. The second QIP (Rs. 550 crore, December 2025) has deployed Rs. 478.32 crore, with Rs. 71.68 crore remaining unutilized. Capital expenditure utilization was only Rs. 6.02 crore against a planned Rs. 15 crore for FY26, and R&D spending was Rs. 7.36 crore against Rs. 15 crore planned. CARE Ratings flagged that Rs. 65.42 crore of unutilized funds held in fixed deposits are partially marked as margin against letters of credit, making them not freely available for stated objects.
The delayed capital expenditure and R&D spending against targets in the second QIP suggests slower-than-expected deployment, potentially due to market conditions. The restricted availability of Rs. 65.42 crore in fixed deposits represents a minor deviation from the intended use of proceeds. Overall fund utilization appears compliant, but investors should monitor pace of deployment in future quarters.