The Sai Parenterals IPO monitoring report flagged deviations involving Rs 238.74 million in issue proceeds for the quarter ended June 30, 2026, according to the company's October 3, 2026 BSE filing. India Ratings & Research, which issued the report on October 2, classified the deviation range as up to 10%.

The observations concern transfers through operating accounts, interest paid from proceeds earmarked for borrowing repayments, and IPO expense documentation. The monitoring agency also said the company had deviated from the prospectus objects without obtaining the requisite shareholders' approval.

Sai Parenterals' board maintained that the flagged funds had been deployed for business or IPO purposes, citing timing differences and operational requirements in its responses. The IPO included a Rs 2,850 million fresh issue and an offer for sale of Rs 1,237.89 million.

Where the monitoring agency identified deviations

  • Capacity expansion: Rs 14.25 million moved from the monitoring account to other cash credit or current accounts was not fully utilised on the transfer date. The agency treated this as a deviation, although the funds were subsequently used for the stated purpose.
  • Borrowing repayments included Rs 1.28 million in interest within total utilisation of Rs 136.54 million. The agency said interest payments were outside the prospectus object.
  • For general corporate purposes, the agency could not independently ascertain the end use of Rs 149.21 million routed through common operating accounts. Identified entries included Rs 44.15 million spent after June 30, Rs 58.90 million mapped to accounts that had not received issue proceeds, and Rs 46.16 million not spent on the transfer date.
  • Issue expenses included Rs 4.28 million identified as utilised after June 30. Separately, a Rs 100 million payment to Arihant Capital Markets lacked supporting invoices or an agreement. This comprised Rs 69.72 million for the fresh issue and Rs 30.28 million for the offer for sale.

Company response and implementation status

The company represented that the Rs 100 million payment was a refundable security deposit for IPO expenses, supported by email confirmations, and had been returned after the reporting period. The board also described interest as part of the borrowing repayment obligation and said general corporate purpose funds had been used for business operations.

The report noted incomplete capacity expansion activities scheduled for June 2026 and board-approved extensions for Unit III and Unit IV to December 2026 and January 2027, respectively.

India Ratings also flagged delayed submission of documents and clarifications by the company. It clarified that the monitoring exercise does not constitute an audit or a securities recommendation.