The Sai Parenterals IPO monitoring report disclosed deviations involving Rs 23.874 crore in issue proceeds, according to the company's BSE filing dated October 3, 2026. India Ratings & Research prepared the report for the quarter ended June 30, 2026, classifying the deviation range as up to 10%.

The report, dated October 2, examined proceeds from the pharmaceutical company's Rs 285 crore fresh issue. It flagged transfers through common operating accounts, interest payments outside the stated borrowing-repayment object and issues concerning IPO expense documentation and utilisation timing.

The monitoring agency also stated that the company had used proceeds in a manner that deviated from the prospectus objects without obtaining the requisite shareholders' approval. The board provided explanations addressing the findings.

Fund routing and expense documentation flagged

  • Capacity expansion: Rs 1.425 crore transferred to other cash credit or current accounts was used for the intended object, but the agency treated it as a deviation because the entire amount was not utilised on the transfer date.
  • Borrowing repayment: Of Rs 13.654 crore utilised, Rs 12.8 lakh represented interest. The agency said interest payments were outside the object disclosed in the prospectus.
  • General corporate purposes: The agency could not independently ascertain the end utilisation of Rs 14.921 crore routed through common operating accounts where IPO proceeds were mixed with operational funds. The identified entries included post-quarter transactions, payments mapped to accounts that had not received issue proceeds and amounts not spent on the transfer date.
  • Issue expenses included Rs 42.8 lakh identified as utilised after June 30. Separately, a Rs 10 crore payment to Arihant Capital Markets lacked supporting invoices or an agreement; Rs 6.972 crore related to the fresh issue and Rs 3.028 crore to the offer for sale.

Board explains utilisation and revised timelines

The board said capacity-expansion funds and the identified general corporate-purpose amounts had been fully deployed for their intended business purposes. It described interest as integral to completing debt repayment. The company also represented, supported by email confirmations, that the Rs 10 crore payment was a refundable IPO expense security deposit returned after the reporting period.

The report noted that certain capacity-expansion activities scheduled for June remained incomplete at quarter-end. Board-approved extensions for Unit III and Unit IV ran to December 2026 and January 2027, respectively.

India Ratings said delayed documents and clarifications from the company affected report preparation. It clarified that the monitoring exercise was not an audit and did not involve independent verification of information received.