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DIVGI TORQTRANSFER SYSTEMS LIMITED Capital/Financing Update 2024

Feb 7, 2024

62154_rns_2024-02-07_b9c4b01f-ff2d-49fe-a721-7e35865353be.pdf

Capital/Financing Update

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Divgi TorqTransfer Systems

Ref.: DTTS/Sec/23-24/107

Divgi TorqTransfer Systems Limited

CIN: L32201MH1964PLC013085 75 , General Block, MIDC, Bhosari, Pune 411 026, India Tel: (+91-20) 63110110 Web: www.divgi-tts.com

February 07, 2024

To, To, BSE Limited, National Stock Exchange of India Limited , Phiroze Jeejeebhoy Towers, "Exchange Plaza" 5th Floor, Dalal Street, Mumbai - 400001 Plot No. C-1, G Block, Bandra Kurla Complex, Bandra (East), Mumbai – 400051 BSE Scrip Code – 543812 NSE Scrip Code - DIVGIITTS

Sub: Submission of Report of Monitoring Agency for the Initial Public Offer

Dear Sir / Madam,

Pursuant to Regulation 41(4) of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 and Regulation 32(6) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, we have attached herewith a Report of Monitoring Agency i.e. ICRA Limited for the quarter ended December 31, 2023.

You are requested to take the same on your record.

Thanking you,

For Divgi TorqTransfer Systems Limited

SANIKA Digitally signed by SANIKA SURENDRA SURENDRA NIRGUDE Date: 2024.02.07 NIRGUDE 11:52:40 +05'30' Sanika Nirgude Company Secretary and Compliance Officer A71466

Enclosure: As above

December 2023

MONITORING AGENCY REPORT

Name of the Issuer: Divgi Torqtransfer Systems Limited For quarter ended: December 31, 2023

Name of the Monitoring Agency (MA): ICRA Limited

  • (a) Deviation from the objects of the issue:

No deviation - the utilization of the issuance proceeds is in line with the objects of the issue.

  • (b) Range of deviation:

Not Applicable

Declaration:

We declare that this report provides an objective view of the utilization of the issue proceeds in relation to the objects of the issue based on the information provided by the Issuer and information obtained from sources believed by it to be accurate and reliable. The MA does not perform an audit and undertakes no independent verification of any information/ certifications/ statements it receives. This Report is not intended to create any legally binding obligations on the MA which accepts no responsibility, whatsoever, for loss or damage from the use of the said information. The views and opinions expressed herein do not constitute the opinion of MA to deal in any security of the Issuer in any manner whatsoever. Nothing mentioned in this report is intended to or should be construed as creating a fiduciary relationship between the MA and any issuer or between the agency and any user of this report. The MA and its affiliates also do not act as an expert as defined under Section 2(38) of the Companies Act, 2013. The MA or its affiliates may have credit rating or other commercial transactions with the entity to which the report pertains and may receive separate compensation for its ratings and certain credit related analyses. We confirm that we do not perceive any conflict of interest in such relationship/ interest while monitoring and reporting the utilization of the issue proceeds by the issuer. We have submitted the report herewith in line with the format prescribed by SEBI, capturing our comments, where applicable. There are certain sections of the report under the title “Comments of the Board of Directors”, that shall be captured by the Issuer’s Management / Audit Committee of the Board of Directors subsequent to the MA submitting their report to the issuer and before dissemination of the report through stock exchanges. These sections have not been reviewed by the MA, and the MA takes no responsibility for such comments of the issuer’s Management/Board.

Signature:

PARUL Digitally signed by PARUL GOYAL GOYAL NARANG Date: 2024.02.06 NARANG 13:51:27 +05'30'

Parul Goyal Narang Vice President & Head- Process Excellence

Analyst: Dhwani Vinchhi QA: Parul Narang

1

December 2023

1. Issuer Details

Name of the Issuer : Divgi Torqtransfer System Limited

Name(s) of the promoters:

Promoters

Hirendra Bhaskar Divgi Jitendra Bhaskar Divgi Divgi Holding Pvt Ltd

Source: BSE

Industry/ sector to which it belongs : Auto Components & Equipments

2. Issue Details

Issue Period : Opening date- March 01, 2023

Closing date- March 03, 2023

Type of Issue : Initial Public Offer

Type of specified securities : Equity shares

IPO Grading, if any : No credit rating agency registered with SEBI has been appointed in respect of obtaining grading for the offer.

Issue Size (Rs. Crore): 412.120

With OFS portion: INR 412.120 Crore; Excluding OFS portion: INR 180.000 Crore. Net proceeds: INR 169.600 Crore (Excluding Issue Related Expenses) *

  • The revised Net Proceeds account stood at INR 169.600 Crore as on 31[st ] December 2023

2

December 2023

3. Details of the arrangement made to ensure the monitoring of issue proceeds.

Particulars Reply Source of information,
certifications considered
by the Monitoring
Agency for the
preparation of report		 Comments of the Monitoring
Agency		 Comments of
the Issuer’s
Board of
Directors
Whether all utilization is as per
the disclosures in the Offer
Document?		 Yes -Peer Reviewed CA-
Certificate
-Confirmation from
management
-Bank statement of the
proceeds account		 No deviation observed.
Whether shareholder approval
has been obtained in case of
material deviations#from
expenditures disclosed in the
Offer Document?		 Not
Applicable		 As confirmed by the
Issuer’s management		 No comments
Whether the means of finance
for the disclosed objects of the
issue has changed?		 No As confirmed by the
Issuer’s management		 No deviation observed.
Is there any major deviation
observed over the earlier
monitoring agency reports?		 No No deviation observed. No comments
Whether all Government/
statutory approvals related to
the object(s) have been
obtained?		 Not
Applicable		 As confirmed by the
Issuer’s management		 No comments
Whether all arrangements
pertaining to technical
assistance/ collaboration are in
operation?		 Not
Applicable		 As confirmed by the
Issuer’s management		 No comments
Are there any favorable events
improving the viability of these
object(s)?		 No As confirmed by the
Issuer’s management		 As understood from the Issuer’s
management
Are there any unfavorable
events affecting the viability of
the object(s)?		 No As confirmed by the
Issuer’s management		 As understood from the Issuer’s
management
Is there any other relevant
information that may materially
affect the decision making of the
investors?		 No As confirmed by the
Issuer’s management		 As understood from the Issuer’s
management

# Where material deviation is defined to mean:

(a) Deviation in the objects or purposes for which the funds had been raised.

(b) Deviation in the amount of funds utilized by more than 10% of the amount specified in the offer document.

3

December 2023

4. Details of the object(s) to be monitored.

(i) Cost of object(s)

S.N. Item Head Source of
information,
certifications
considered by
the Monitoring
Agency for the
preparation of
report		 Original
cost (as per
the offer
document)
[Rs. Crore]		 Revised
cost
[Rs.
Crore]		 Comments of the
Monitoring Agency		 Comments of the Issuer’s Board of
Directors		 Comments of the Issuer’s Board of
Directors		 Comments of the Issuer’s Board of
Directors
Reason
for cost
revision		 Propos
ed
financi
ng
option		 Particulars of
firm
arrangements
made
1 Funding capital
expenditure
requirements for the
purchase of
equipments/
machineries of our
manufacturing
facilities		 Letter of Offer 150.707 - No comments
2 General Corporate
Purpose		 Letter of Offer 17.727 18.893 Revision in General
Corporate Purpose is
on account of actual
offer related
expenditure being
lower then
estimated by INR
1.166 Crore
Total 168.434 169.600

4

December 2023

(ii) Progress in the object(s)

S.N. Item Head* Source of
information,
certifications
considered by the
Monitoring Agency
for the preparation of
report		 At tilid At tilid At tilid Comments of the
Issuer’s Board of
Directors		 Comments of the
Issuer’s Board of
Directors
Amount as moun uze Tl
R C
proposed
in the offer
document
[Rs. Crore]		 [s. rore] ota
unutilized		 Comments of the
Monitoring Agency
As at the
beginning
of the
quarter		 During the
quarter		 At the
end of the
quarter		 Reasons
for idle
funds		 Proposed
course of
action
amount
[Rs. Crore]
Funding capital
expenditure -Peer Reviewed CA-
1 requirements for the
 Certificate
purchase of
equipments/
machineries of our
manufacturing facilities		 -Bank statement of
the proceeds account		 150.707 16.225 4.711 20.936 129.771 No comments
2 General corporate
purposes		 Same as above 17.727
(18.893) *		 - 13.241 13.241 5.652 Revision in General
Corporate Purpose is
on account of actual
offer related
expenditure being
lower then estimated
by INR 1.166 Crore
Total 169.600 16.225 17.952 34.177 135.423

*Revised cost as per point 4(i) above.

5

December 2023

(iii) Deployment of unutilized proceeds

S.N. Type of instrument and name
of the entity invested in		 Amount
invested
[Rs.
Crore]		 Maturity date Earning
[Rs. Crore]		 Return on
Investment
[%]		 Market Value as
at the end of
quarter
[Rs. Crore]
1 Fixed Deposit with SBI Bank 125.00 April 02, 2024 7.737 7.85% 132.737
2 Fixed Deposit with HDFC Bank 10.541 September 09, 2024 0.249 7.30% 10.790
3 Proceeds Account 0.151 - - - 0.151
4 Amount Retained by BRLM’s 0.750 - - - 0.750
Total 136.442* - 7.986 - 144.428
Source: As certified by A.R Sulakhe & Company, Chartered Accountant (ICA).

*The additional unutilized amount of INR 1.019 pertains to Interest income net of withdrawals by Divgi TorqTransfer Systems Limited

6

December 2023

(iv) Delay in the implementation of the object(s)

Completion date Completion date Comments of the Issuer’s Board of
Directors		 Comments of the Issuer’s Board of
Directors
Object(s) As per the
offer
document		 Actual^ Delay
[Number of days or
months]		 Reason for delay Proposed course of
action
Funding capital
expenditure
requirements for the
purchase of
equipments
/machineries of our
manufacturing
facilities		 FY24 & FY25 On Schedule NA No comments No comments
General corporate
purposes		 FY24 On Schedule NA No comments No comments

Source: As confirmed by the Issuer’s management

  • ^ Refers to the latest estimate of the completion date

5. Details of utilization of proceeds stated as General Corporate Purpose (GCP) amount in the offer document

S.N. Item Head Amount
[Rs.
Crore]		 Source of information, certifications
considered by the Monitoring Agency
for the preparation of report		 Comments of the
Monitoring
Agency		 Comments of the
Issuer’s Board of
Directors
1 Purchase of CNC
External Cylindrical
Grinding Machine		 0.994 -Peer Reviewed CA- Certificate
-Bank statement of the proceeds
account
-		 No Comments
2 Retroffiting & Labour
charges		 0.455 Same as above No Comments
3 Fabrication & other
works		 0.234 Same as above No Comments
4 Rail Assly work for
Heat Treatment		 0.091 Same as above No Comments
5 Tooling & Fixtures of
5th/6th/7th M/C HMC
Machines		 0.482 Same as above No Comments
6 5th /6th & 7th M/c HMC
machines		 0.493 Same as above No Comments
7 Technical Testing of E
Gear Drive		 0.241 Same as above No Comments

7

December 2023

S.N. Item Head Amount
[Rs.
Crore]		 Source of information, certifications
considered by the Monitoring Agency
for the preparation of report		 Comments of the
Monitoring
Agency		 Comments of the
Issuer’s Board of
Directors
8 HT Work supply 0.069 Same as above No Comments
9 Purchase of UPS 80KVA
(2 Nos)		 0.141 Same as above No Comments
10 Royalty Payment-Jan
2022-Dec 2022		 5.596 Same as above No Comments
11 3 Dyno Test 4.445 Same as above No Comments
Total 13.241

8

December 2023

6. Details of locked-in equity share capital held by the Promoters

Number of
Equity
shares held
by the
promoter
group on the
date of
allotment of
offer		 Number of Equity shares
held by the promoter as
on 31-December-2023		 Number of Equity shares
held by the promoter as
on 31-December-2023		 Lock in
release
date		 %
Shareholdi
ng of the
promoter
group as
on 31-
December-
2023		 Regulatory
stipulation
for the % of
promoter
shares to be
locked-in and
Lock-in
period end
date		 Source of
information,
certifications
considered by
the
Monitoring
Agency for the
preparation of
report		 Comments of the
Monitoring
Agency		 Comm
ents
of the
Issuer’
s
Board
of
Direct
ors
Promoter
name		 Total
Shares
17,245,840 Divgi
Holdings
Private
Limited		 5,627,561 8/03/20
26		 20.10% 20% of the
Promoters
share post
offer should
be locked in
for 3 years		 Lock in
certificate by
depository		 “The equity
shareholding of
the promoter
group is in
accordance with
the lock-in
requirements
specified by SEBI”		 -
Hitendra
Divgi		 261,177
Jitendra
Divgi		 260,535
Divgi
Holdings
Private
Limited		 10,155,119 8/03/20
24		 36.28% Shareholding
in excess of
20% should
be locked in
for 1 year		 Lock in
certificate by
depository		 “The equity
shareholding of
the promoter
group is in
accordance with
the lock-in
requirements
specified by SEBI”		 -
Hitendra
Divgi		 471,303
Jitendra
Divgi		 470,145
Grand Total 17,245,840

9

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