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IKIO Technologies Limited Capital/Financing Update 2024

Feb 13, 2024

59691_rns_2024-02-13_45d40586-a041-4592-a400-3dc903ca89a7.pdf

Capital/Financing Update

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SANDEEP Digitally signed by SANDEEP KUMAR KUMAR AGARWAL Date: 2024.02.13 AGARWAL 14:18:41 +05'30'

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Monitoring Agency Report for IKIO Lighting Limited for the quarter ended December 31, 2023

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CRL/MAR/IKLIPL/2023-24/1073

February 13, 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 December 31, 2023 - 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 December 31, 2023.

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: December 31, 2023

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 3,257.50 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 IPO expenses retained in “Public Issue Account” (Refer: footnote to the IPO expenses table on page no. 116 of the prospectus, reproduced here for case of reference “All aforementioned fees do not include applicable taxes”)

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
Is there any major deviation observed over the
earlier monitoringagencyreports?		 No No Comments No
Comments
Whether all Government/statutory approvals
related to the object(s)have been obtained?		 No Refer Note 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
Whether all arrangements pertaining to
technical
assistance/collaboration
are
in
operation?		 NA Management
undertaking,
Statutory Auditor
Certificate^		 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 In Process
5 Factory License Industrial
Department		 Before commissioning In Process

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

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  • 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#		 669.55 634.38 Refer note No
Comments		 No
Comments		 No
Comments
Total - 3,292.67 3,257.50 - - - -

^Certificate dated January 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: GST amount of Rs 35.17 million on IPO expenses retained in “Public Issue Account” (Refer: footnote to the IPO expenses table on page no. 116 of the prospectus, reproduced here for case of reference “All aforementioned fees do not include applicable taxes”)

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

Sr.
No.		 Source of
*Amount utilized ** Comments of the Board
information/ Amount

certifications		 as (Rs in million) of Directors
considered by
proposed		 Total Comments of
Monitoring in the unutilized the
As at At the

**Item Head# **
Agency for		 Offer amount Monitoring

beginning
During		 end
Proposed

preparation of
Document		 (Rs in
Agency		 Reasons for

of the		 the of the
course of

report
(Rs in		 million) idle funds
quarter quarter quarter action
million)
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 Nil 500.00 Nil 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		 2,123.12 138.79 Refer Note No
Comments
No
Comments
215.02 353.81 1,769.31
3 General Corporate
Purposes		 634.38** 203.75 No
comments		 No
Comments
No
Comments
181.77 385.52 248.86
Total - 3,257.50 842.54 - - -
396.79 1,239.33
2,018.17

^Certificate dated January 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

  • Net proceeds are utilised by the Company by transferring from Monitoring Agency Account opened and maintained by the Company with HDFC bank to another separate bank account of Company termed as “IKIO Lighting Limited - Object account” maintained with HDFC bank. This is in variation to the standard industry practice of utilising funds directly from Company’s Monitoring Agency account. However, out of the transferred proceeds, balance of Rs 0.01 million is lying in object account of IKIO Lighting Limited as at the end of the reported quarter.

**GST amount of Rs 35.17 million on IPO expenses retained in “Public Issue Account” (Refer: footnote to the IPO expenses table on page no. 116 of the prospectus, reproduced here for case of reference “All aforementioned fees do not include applicable taxes”)

Note: This utilisation is in line with the resolution dated 04 November 2023 approved by the Board of Directors of the Company for the year FY 2023-2024 amounting to Rs 1,500.00 million towards objects of the issue.

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#Brief description of objects:

Object of the Issue Description of objects asper the offer document filed by the 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
December
31, 2023
(in
million)		 Return on
Investment
(%)		 Market value as at
the end of quarter
(in million)
1 HDFC Fixed Deposit –
50300813076361		 400.00 15-Jan-24 15.57 7.25 415.57
2 HDFC Fixed Deposit –
50300813065511		 400.00 20-Mar-24 15.89 7.40 415.89
3 HDFC Fixed Deposit –
50300813056446		 400.00 19-Jun-24 15.89 7.40 415.89
4 HDFC Fixed Deposit –
50300844531650		 50.00 22-Feb-24 1.28 7.00 51.28
5 HDFC Fixed Deposit –
50300858378524		 180.00 22-Feb-24 3.55 6.85 183.55
6 HDFC Fixed Deposit –
50300901953420		 52.40 15-Jul-24 0.11 6.75 52.51
7 HDFC Fixed Deposit –
50300900885147		 42.5 2-Jan-24 0.07 4.75 42.57
8 HDFC Fixed Deposit –
50300903884367#		 3.5 28-Mar-25 0.00 7.10 3.50
9 HDFC Fixed Deposit –
50300874383166		 20.00 20-May-24 0.27 6.65 20.27
10 HDFC Fixed Deposit –
50300874402791		 100.00 20-May-24 1.43 7.15 101.43
11 HDFC Fixed Deposit –
50300874403101		 50.00 22-Apr-24 0.72 7.15 50.72
12 HDFC Fixed Deposit –
50300874403512		 100.00 22-Apr-24 1.43 7.15 101.43
13 HDFC Fixed Deposit –
50300888086177		 90.00 22-Aug-24 0.73 7.25 90.73
14 HDFC Fixed Deposit –
50300888086533		 110.00 22-Aug-24 0.90 7.25 110.90
15 HDFC Fixed Deposit –
50300901638362		 50.00 15-Jul-24 0.11 6.75 50.11
16 Balance net proceeds
lying in Monitoring
account of the company		 0.19 NA NA NA 0.19
17 Balance net proceeds
lying in IKIO Solutions
Private Limited - Object
account		 0.88 NA NA NA 0.88
18 Balance net proceeds
lying in IKIO Lighting
Limited - Object
account		 0.01 NA NA NA 0.01
Total 2,049.48* - 57.94 - 2,107.42

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*This includes Rs 31.31 million interest earned on FDRs

#This is against custom indemnity bond for import of goods at concessional rate of duty.

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

^On the basis of management undertaking and Certificate dated January 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 January 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 Amount@
(Rs in million)		 Remarks
1 Administration costs 19.93 Expenses incurred in ordinary course of business.
(Refer Note)
2 Outflow for new
overseas business
establishment		 76.23**
3 General Capex 7.90
4 Vendor Payment -
WorkingCapital		 77.71
Total 181.77

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

**This includes investment by way of equity into step-down subsidiary (Royalux LLC) of the Company, amounting to Rs 75.89 million.

Note: This utilisation is in line with the resolution dated 04 November 2023 approved by the Board of Directors of the Company for the year FY 2023-2024 amounting to Rs 1,500.00 million towards objects of the issue.

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

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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. 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.

  • i) It is made abundantly clear that the report is not intended to and does not constitute an investment advice. The report is not an offer to sell or an offer to purchase or subscribe for any investment in any securities, instruments, facilities or solicitation of any kind to enter into any deal or transaction with the entity to which the report pertains. The report should not be a basis for any investment decision within the meaning of any law or regulation (including the laws and regulations applicable in the US).

  • 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.

  • l) CRL has established policies and procedures to maintain the confidentiality of certain non-public information received in connection with the preparation of this report. CRL has in place a code of conduct and policies for managing conflict of interest.

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  • m) Unless required under any applicable law, this report should not be reproduced or redistributed to any other person or in any form without prior written consent from CRL.

  • n) By accepting a copy of this Report, the recipient accepts the terms of this Disclaimer, which forms an integral part of this Report.

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