JHS Svendgaard Laboratories Limited has informed the Exchange about variation in the objects for the utilization of the proceeds from the Preferential Issue approved by shareholders on dated 04th July, 2024
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JHS Svendgaard Laboratories' board has approved revising how it will use around Rs. 30 crore raised through a 2024 preferential issue (which included warrants convertible into equity shares). The original plan was to set up a new project in Jammu & Kashmir (Rs. 22.5 crore) and keep Rs. 7.5 crore for general corporate purposes. Under the revised plan, the J&K project is being dropped. Instead, the company will spend Rs. 6 crore on new manufacturing equipment, Rs. 16.5 crore to fund expansion through its associate entity JHS Svendgaard Retail Ventures Ltd. (and/or its subsidiary), and Rs. 7.5 crore for general corporate purposes. The deadline for using the money has also been pushed from January 15, 2026 to December 15, 2026.
Shareholders should note that nearly 55% of the issue proceeds (Rs. 16.5 crore) is now being routed into an associate company, which carries related-party and execution risk. The scrapping of the J&K project and longer deployment timeline may be viewed negatively by investors who expected that specific use of funds.