Shakti Pumps (India) Limited’s Monitoring Agency Report for the quarter ended September 30, 2026, highlights deviations in the utilization of funds raised through Qualified Institutions Placements (QIPs). India Ratings & Research, the monitoring agency, noted that funds allocated for Plant & Machineries were used at the existing manufacturing unit rather than the proposed expansion site. Additionally, the land acquired was less than estimated, and costs for plant and machinery were different from the placement document.
Monitoring Agency Flags Fund Utilization Discrepancies
The latest Monitoring Agency Report for Shakti Pumps (India) Limited, covering the quarter ended September 30, 2026, indicates several discrepancies in the utilization of funds raised via Qualified Institutions Placements (QIPs). The report, prepared by India Ratings & Research, points out deviations from the objects outlined in the placement document.
Deviations Noted
Plant & Machinery Utilization
A key observation is the utilization of INR 44.13 Mn towards Plant & Machineries. These were installed and used at the company’s existing manufacturing unit for its current production capacity, rather than for the proposed expansion at a new facility as stated in the QIP objectives. This marks a deviation from the originally disclosed plans.
Land Acquisition Discrepancy
The report also highlights a significant difference in land acquisition. While the Placement Document estimated the cost of land at INR 160.00 Mn for an area of 45.66 acres, the company utilized INR 198.06 Mn but received only 23.35 acres. The final lease deed registered is for approximately 21.45 acres.
Cost Variances for Projects
Further details reveal cost variations for specific projects. For Inverters, Variable Frequency Drives (VFDs) & Structures, the estimated cost in the Placement Document was INR 253.00 Mn. Actual utilization from QIP proceeds for P&M for VFDs was INR 66.11 Mn, and for structures was INR 44.04 Mn. While Chartered Engineer Certificates confirm actual costs deployed (INR 146.31 Mn for VFDs and INR 105.82 Mn for structures), the utilization from QIP proceeds is lower than the initial estimates, with the balance funded by own funds. Project cost optimization due to changes in manufacturing technology is cited as a reason for lower actual costs.
Other Observations
The report also indicates a delay in the deployment and implementation of certain objects. The expansion for inverters, VFDs, and structures has been undertaken at the existing facility instead of the new land acquired, a change that has been approved by the Board.
Monitoring Agency’s Stance
India Ratings & Research has stated that its report provides an objective view based on information provided by the issuer. It also clarified that it does not perform audits and relies on management undertakings and provided documents. The report is intended for monitoring the utilization of QIP proceeds as per SEBI ICDR Regulations.
Source: BSE
