IKIO Technologies Limited — Capital/Financing Update 2024

Nov 13, 2024

SANDEEP Digitally signed by SANDEEP KUMAR KUMAR AGARWAL Date: 2024.11.13 AGARWAL 15:48:19 +05'30'

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Monitoring Agency Report for IKIO Lighting Limited for the quarter ended September 30, 2024

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CRL/MAR/IKLIPL/2024-25/1198

November 11, 2024

To

IKIO Lighting Limited 411, Arunachal Building, 19 Barakhamba Road, Connaught Place, New Delhi – 110 001

Dear Sir,

Monitoring Agency Report for the quarter ended September 30, 2024 - in relation to the Initial Public Offer (“IPO”) of IKIO Lighting Limited (“the Company”)

Pursuant to Regulation 41(2) of SEBI (lssue of Capital and Disclosure Requirements) Regulations, 2018 (“SEBI ICDR Regulations”) and Monitoring Agency Agreement dated April 18, 2023, enclosed herewith the Monitoring Agency Report, issued by CRISIL Ratings Limited, Monitoring Agency, as per Schedule XI of the SEBI ICDR Regulations towards utilization of proceeds of IPO for the quarter ended September 30, 2024.

Request you to kindly take the same on records.

Thanking you,

For and on behalf of CRISIL Ratings Limited

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Sushant Sarode

Director, Ratings (LCG)

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Report of the Monitoring Agency (MA)

Name of the issuer: IKIO Lighting Limited

For quarter ended: September 30, 2024

Name of the Monitoring Agency: CRISIL Ratings Limited

• (a) Deviation from the objects: Not applicable

• (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:

Name and designation of the Authorized Signatory: Sushant Sarode Designation of Authorized person/Signing Authority: Director, Ratings (LCG)

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1) Issuer Details:

Name of the issuer:

IKIO Lighting Limited

Names of the promoter:

a. Hardeep Singh b. Surmeet Kaur

Industry/sector to which it belongs: Consumer electronics

2) Issue Details

Issue Period: Tuesday, June 06, 2023 to Thursday, June 08, 2023 Type of issue (public/rights): Initial Public Offer (IPO) Type of specified securities: Equity Shares IPO Grading, if any: NA Issue size: Rs 6,065.00 million Issue size comprises of fresh issuance/gross proceeds of Rs 3,500.00 million (Net proceeds of Rs 3,261.41 million*) and an offer for sale of Rs 2,565.00 million

*CRISIL Ratings shall be monitoring the net proceeds amount. GST amount of Rs 35.17 million on Issue related expenses retained in “Public Issue Account” during the quarter ended June 30, 2023 was reduced from net proceeds and further, during the quarter ended June 30, 2024 after payment of all Issue related expenses including GST, the remaining surplus balance of Rs 3.91 million in “Public Issue Account” was transferred to “Monitoring Account” and is added to GCP, hence, the net proceeds were revised to Rs 3,261.41 million.

3) Details of the arrangement made to ensure the monitoring of issue proceeds:

Particulars	Reply	Source of information/ certifications considered by Monitoring Agency for preparation of report	Comments of the Monitoring Agency	Comments of the Board of Directors
Whether all utilization is as per the disclosures in the Offer Document?	Yes	Management undertaking, Statutory Auditor Certificate^, Final Offer Document, Bank Statements	No Comments	No Comments
Whether shareholder approval has been obtained in case of material deviations from expenditures disclosed in the Offer Document?	NA	Management undertaking, Statutory Auditor Certificate^	No Comments	No Comments
Whether the means of finance for the disclosed objects of the issue has changed?	No		No Comments	No Comments

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Particulars	Reply	Source of information/ certifications considered by Monitoring Agency for preparation of report	Comments of the Monitoring Agency	Comments of the Board of Directors
Is there any major deviation observed over the earlier monitoringagencyreports?	No	Management undertaking, Statutory Auditor Certificate^	No Comments	No Comments
Whether all Government/statutory approvals related to the object(s)have been obtained?	Yes		Refer Note	No Comments
Whether all arrangements pertaining to technical assistance/collaboration are in operation?	NA		No Comments	No Comments
Are there any favorable events improving the viabilityof these object(s)?	No		No Comments	No Comments
Are there any unfavorable events affecting the viabilityof the object(s)?	No		No Comments	No Comments
Is there any other relevant information that may materially affect the decision making of the investors?	No		No Comments	No Comments

NA represents Not Applicable

Note: As per the offer document filed by the Company, the Company is required to obtain below mentioned approvals from government/statutory bodies, in relation to proposed objects and the status of these approvals as at the end of the reported quarter is as follows:

Sr. No.	Approval for	Authority	Stage at which approvals are required	Status
1	In-principle approval of buildinglayout	Noida Authority	-	Obtained
2	Consent to establish before commissioning	Noida Authority	Before commissioning	Obtained
3	Sanction of electrical load	UP Electricity Board	Before commissioning	Obtained
4	In-principle approval to construct, extend or take into use any buildingas a factory	Noida Authority	Before commissioning	Obtained
5	Factory License (Refer note 1)	Industrial Department	Before commissioning	Obtained

Note 1: The Board of Directors of the Company vide resolution dated 28 June 2023 has approved the leasing of separate premises situated at, “Ikio Solutions Pvt Ltd Unit 2, Plot No- 6, Sector- 156, Gautam Buddha Nagar, 201310, District – Gautam Buddh Nagar” to speed up the production for object 2, the plant and machinery was installed in the leased premises for which factory licence was received on 08 January 2024 and commercial production started with effect from 20 March 2024.

The leased premises are adjacent to the land already owned by the Company located at “Plot No 10, Sector 156, Noida, Gautam Budh Nagar, Uttar Pradesh – 201301” as mentioned in the prospectus filed by the Company.

As per the relevant extracts provided in the prospectus filed by the Company, “We may have to revise our funding requirement on account of various factors, such as financial and market conditions, delay in procuring and operationalizing assets or necessary licenses and approvals, competition, price fluctuations, interest rate fluctuations and other external factors, which may not be within the control of our management. This may also entail rescheduling of the proposed deployment of the Net Proceeds at the discretion of our management, subject to compliance with applicable laws.” Hence utilisation from these leased premises is in line with the disclosures provided in the prospectus filed by the Company.

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^Certificate dated October 29, 2024, issued by M/s BGJC & Associates LLP, Chartered Accountants (Firm Registration Number: 003304N/N500056), Statutory Auditors of the Company.

4) Details of object(s) to be monitored:

i. Cost of the object(s):

Sr. No.	Item Head	Source of information/ certification considered by MA for preparation of report	Original cost (as per the Offer Document) (Rs in million)	Revised Cost (Rs in million)	Comment of the MA	Comments of the Board of Directors	Comments of the Board of Directors	Comments of the Board of Directors
						Reason of Cost revision	Proposed financing option	Particulars of firm arrange- ments made
1	Repayment/ prepayment, in full or part, of certain borrowings availed by Company and its Subsidiaries on consolidated basis	Management undertaking, Statutory Auditor Certificate^, Final offer document	500.00	500.00	No Comments	No Comments	No Comments	No Comments
2	Investment in wholly owned Subsidiary, IKIO Solutions Private Limited, for setting up a new facility at Noida, Uttar Pradesh		2,123.12	2,123.12	No Comments	No Comments	No Comments	No Comments
3	General Corporate Purposes#		669.55	638.29	Refer note 2	No Comments	No Comments	No Comments
	Total	-	3,292.67	3,261.41	-	-	-	-

^Certificate dated October 29, 2024, issued by M/s BGJC & Associates LLP, Chartered Accountants (Firm Registration Number: 003304N/N500056), Statutory Auditors of the Company.

The amount utilised for general corporate purposes does not exceed 25% of the Gross Proceeds (amounting to Rs 875.00 million) from the Fresh Issue.

Note 2: GST amount of Rs 35.17 million on Issue related expenses retained in “Public Issue Account” during the quarter ended June 30, 2023 was reduced from net proceeds and further, during the quarter ended June 30, 2024 after payment of all Issue related expenses including GST, the remaining surplus balance of Rs 3.91 million in “Public Issue Account” was transferred to “Monitoring Account” and is added to GCP, hence, the net proceeds were revised to Rs 3,261.41 million.

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ii. Progress in the object(s)[#] :

Sr. No.
				Amount utilized					Comments of the Board
		Source of
				(Rs in million)					of Directors
		information/	Amount
		certifications	as
		considered by	proposed				Total	Comments of
		Monitoring	in the				unutilized	the
	Item Head	Agency for	Offer	As at		At the	amount	Monitoring
		preparation of	Document	beginning	During	end	(Rs in	Agency		Proposed
		report	(Rs in	of the	the	of the	million)		Reasons for	course of
			million)	quarter	quarter	quarter			idle funds	action
1	Repayment/ prepayment, in full or part, of certain borrowings availed by Company and its Subsidiaries on consolidated basis	Management undertaking, Statutory Auditor Certificate^, Final Offer Document, Bank Statements	500.00	500.00	0.00	500	0.00	Fully utilised during quarter ended June 30, 2023	No Comments	No Comments
2	Investment in wholly owned Subsidiary, IKIO Solutions Private Limited, for setting up a new facility at Noida, Uttar Pradesh		2,123.12	756.07				No comments	No Comments	No Comments
					195.25	951.32	1,171.8
3	General Corporate Purposes		638.29 (Refer note 2)	482.27				No comments	No Comments	No Comments
					69.47	551.74	86.55
	Total	-	3,261.41	1,738.34				-	-	-
					264.72
					(Refer note	2,003.06	1,258.35
					3)

^Certificate dated October 29, 2024, issued by M/s BGJC & Associates LLP, Chartered Accountants (Firm Registration Number: 003304N/N500056), Statutory Auditors of the Company.

All figures in the above table are rounded off to nearest two decimal places

Note 3: The Board of Directors of the Company vide resolution dated 24 May, 2024 has approved the utilization of net proceeds for FY 2024-2025 amounting to Rs 1,000 million across overall objects. Of this amount, the board approved the provisional amount of Rs 195.00 million towards GCP

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#Brief description of objects:

Object of the Issue	Description of objects asper the offer document filed bythe issuer
Repayment/ prepayment, in full or part, of certain borrowings availed by Company and its Subsidiaries on consolidated basis	The loan facilities availed by the Company and its Subsidiaries include borrowing in the form of, inter alia, vehicle loans, term loans and working capital facilities including fund based and non-fund-based borrowings. As at January 31, 2023, total outstanding borrowings amounted on consolidated basis to₹1,515.53 million. Company proposes to utilise an estimated amount of₹500.00 million from the Net Proceeds towards full or partial repayment or pre-payment of certain borrowings availed by the Company and its Subsidiaries on consolidated basis.
Investment in wholly owned Subsidiary, IKIO Solutions Private Limited, for setting up a new facility at Noida, Uttar Pradesh	Investment in wholly owned Subsidiary, IKIO Solutions, in order to set up a new manufacturing facility at Noida, Uttar Pradesh. The proposed investment by the Company will be undertaken to set -up a new manufacturing facility for carrying out electronic manufacturing services. This will also allow the Company to better serve its existing customers, assist in better addressing the business requirements of large customers, and allowing them to expand into new business verticals, in particular, to address the growing consumer of electronic manufacturing services for lights, rotary switch and electric switch, socket, ABS pipe and solar for recreational vehicles.
General Corporate Purposes (GCP)	The general corporate purposes for which the Company proposes to utilize Net Proceeds include, without limitation: (i) Business development initiatives, (ii) Research and development, (iii) Meeting any expense including salaries and wages, rent, administration costs, insurance premiums, repairs and maintenance, (iv) Payment of taxes and duties, Other similar other expenses incurred in the ordinary course of the business or towards any exigencies

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iii. Deployment of unutilised proceeds[^] :

S. No.	Type of instrument where amount is invested	Amount invested (in million)	Maturity date	Earnings as on September 30, 2024 (in million)	Return on Investment	Market value as at the end of quarter (in million)
1	Fixed Deposit- HDFC Bank	70.00	21-Dec-24	1.41	7.10%	71.41
2	Fixed Deposit- HDFC Bank	50.00	29-May-25	0.40	7.35%	50.40
3	Fixed Deposit- HDFC Bank	45.00	5-May-25	1.51	7.55%	46.51
4	Fixed Deposit- HDFC Bank	250.00	19-Jun-25	5.45	7.65%	255.45
5	Fixed Deposit- HDFC Bank	50.00	22-Aug-25	1.80	7.55%	56.80
6	Fixed Deposit- HDFC Bank	50.00	16-Jul-25	0.79	7.55%	50.79
7	Fixed Deposit- HDFC Bank	55.00	3-Mar-25	0.41	7.35%	50.41
8	Fixed Deposit- HDFC Bank	50.00	4-Oct-24	1.95	7.25%	51.95
9	Fixed Deposit- HDFC Bank	50.00	22-Oct-24	2.23	7.25%	52.23
10	Fixed Deposit- HDFC Bank	50.00	25-Nov-24	2.26	7.35%	52.26
11	Fixed Deposit- HDFC Bank	50.00	3-Jan-25	1.98	7.35%	51.98
12	Fixed Deposit- HDFC Bank	250.00	15-Jan-25	13.99	7.75%	263.99
13	Fixed Deposit- HDFC Bank	50.00	4-Feb-25	1.98	7.35%	51.98
14	Fixed Deposit- HDFC Bank	150.00	4-Apr-25	6.26	7.75%	156.26
15	Fixed Deposit- HDFC Bank (Refer note 5)	3.50	28-Mar-25	0.19	7.10%	3.69
16	Fixed Deposit- HDFC Bank (Refer note 5)	3.00	26-Aug-25	0.13	7.25%	3.13
17	Balance net proceeds lying in Monitoring account of the company	1.14	NA	NA	NA	1.14
18	Balance net proceeds lying in IKIO Solutions Private Limited - Object account	1.47	NA	NA	NA	1.47
19	Balance net proceeds lying in IKIO Lighting Limited - Object account(Refer note 6 & 7)	31.61	NA	NA	NA	31.61
	Total	1,260.72 (Refer note 4)				1,303.46
				42.74

Note 4: Total interest received in Monitoring agency account of the Company till quarter ended September 30, 2024 from closure of FDs amounted to Rs 127.37 million, further, Rs 125.0 million is transferred to current account of the company, out of which Rs 45.00 million is transferred during the reported quarter for business purposes and hence Rs 2.37 million is lying in Monitoring agency account as at the end of the reported quarter. Hence the above mentioned balance includes the interest amount earned on FDs

Note 5: This FD is against Custom indemnity bond for import of goods at concessional rate of duty.

Note 6: During the normal course of transactions of the business, the Company had issued cheques worth Rs 1.23 million to vendors for payments against liability recorded in the books of accounts of the Company, these cheques were not presented for payment by the vendors to the bank till the end of the reported quarter. Since, these cheques are issued against the purchase of project assets which form part of the objects of issue, hence, the amount of Rs 1.23 million is considered as part of utilised amount during the reported quarter.

Note 7: During Current quarter, the Company have received payment of Rs 0.08 million from its customer in the object account erroneously and after the end of reported quarter this amount has been shifted to the current account of ISPL. Hence, No impact has been considered in project cost and balance in ISPL object account during the reported quarter.

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Note 8: Monitoring the deployment of Interest Income earned from unutilised proceeds & utilisation towards issue expenses does not form part of the scope of Monitoring Agency report.

Note: All figures in the above table are rounded off to nearest two decimal places

^On the basis of management undertaking and Certificate dated October 29, 2024, issued by M/s BGJC & Associates LLP, Chartered Accountants (Firm Registration Number: 003304N/N500056), Statutory Auditors of the Company.

iv. Delay in implementation of the object(s)^:

				Comments of the Board of	Comments of the Board of
	Completion Date
				Directors
			Delay
	As per the				Proposed course
Object(s)			(no. of days/	Reason of
	Offer	Actual	months)	delay	of
	Document				action
	Not Applicable

^On the basis of management undertaking and Certificate dated October 29, 2024, issued by M/s BGJC & Associates LLP, Chartered Accountants (Firm Registration Number: 003304N/N500056), Statutory Auditors of the Company.

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

S. No.	Item heads(Refer note 4)	Amount@ (Rs in million)	Remarks
1	Administration costs	8.53	Expenses incurred in ordinary course of business.
2	General Capex	1.53
3	Vendor Payment - WorkingCapital	16.73
4	Investment into step- down subsidiary(Refer Note 8)	42.68
	Total	69.47

^On the basis of management undertaking and Certificate dated October 29, 2024, issued by M/s BGJC & Associates LLP, Chartered Accountants (Firm Registration Number: 003304N/N500056), Statutory Auditors of the Company

Note 8- This includes investment by way of equity into step-down subsidiary (Royalux LLC) of the Company, amounting to Rs 42.68 million.

@All figures in the above table are rounded off to nearest two decimal places

Disclaimers:

• a) This Report is prepared by CRISIL Ratings Limited (hereinafter referred to as "Monitoring Agency” / “MA" / “CRL”). The MA has taken utmost care to ensure accuracy and objectivity while developing this Report based on the information provided by the Issuer and information obtained from sources believed by it to be accurate and reliable.

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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.

• b) This Report has to be seen in its entirety; the selective review of portions of the Report may lead to inaccurate assessments. For the purpose of this Report, MA has relied upon the information provided by the management /officials/ consultants of the Issuer and third-party sources like statutory auditors (or from peer reviewed CA firms) appointed by the Issuer believed by it to be accurate and reliable.

• c) Nothing contained in this Report is capable or 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 MA is also not responsible for any errors in transmission and specifically states that it, or its directors, employees do not have any financial liabilities whatsoever to the users of this Report.

• d) The MA and its affiliates do not act as a fiduciary. The MA and its affiliates also do not act as an expert to the extent defined under Section 2(38) of the Companies Act, 2013. While the MA has obtained information from sources it believes to be reliable, it does not perform an audit and undertakes no independent verification of any information/ certifications/ statements it receives from auditors (or from peer reviewed CA firms), lawyers, chartered engineers or other experts, and relies on in its reports.

• e) The MA or its affiliates may have other commercial transactions with the entity to which the report pertains. As an example, the MA may rate the issuer or any debt instruments / facilities issued or proposed to be issued by the issuer that is subject matter of this report. The MA may receive separate compensation for its ratings and certain creditrelated analyses, normally from issuers or underwriters of the instruments, facilities, securities or from obligors.

• f) The MA report is intended for the jurisdiction of India only. This report does not constitute an offer of services. Without limiting the generality of the foregoing, nothing in the report is to be construed as CRL providing or intending to provide any services in jurisdictions outside India, where it does not have the necessary licenses and/or registration to carry out its business activities referred to above.

• g) Access or use of this report does not create a client relationship between CRL and the user.

• h) CRL is not aware that any user intends to rely on the report or of the manner in which a user intends to use the report. In preparing this report, MA has not taken into consideration the objectives or particular needs of any particular user.

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• j) The report comprises professional opinion of CRL as of the date they are expressed, based on the information received from the issuer and other sources considered reliable by CRL. Any opinions expressed here are in good faith, are subject to change without notice, and are only current as of the stated date of their issue. The report does not constitute statements of fact or recommendations to purchase, hold or sell any securities/instruments or to make any investment decisions.

• k) Neither CRL nor its affiliates, third-party providers, as well as their directors, officers, shareholders, employees or agents guarantee the accuracy, completeness or adequacy of the report, and shall not have any liability for any errors, omissions or interruptions therein, regardless of the cause, or for the results obtained from the use of any part of the report. CRL and each aforesaid party disclaims any and all express or implied warranties, including but not limited to any warranties of merchantability, suitability or fitness for a particular purpose or use or use. In no event shall CRL or any aforesaid party be liable to any user for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees or losses (including, without limitation, lost income or lost profits and opportunity costs) in connection with any use of any part of the report even if advised of the possibility of such damages.

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