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Nova Agritech Limited Capital/Financing Update 2024

Aug 12, 2024

59150_rns_2024-08-12_8d50d476-78f4-4f46-b603-5c05016a0f8e.pdf

Capital/Financing Update

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Registered Office: Sy.No.251/A/1., Singannaguda Village Mulugu Mandal, Medak, Siddipet - 502279, Telangana, India

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CIN : L01119TG2007PLC053901

+91 84 5425 3446 • [email protected]

12[th] August, 2024

To

BSE Limited ,

Listing Department, P J Towers,

Dalal Street, Mumbai – 400 001

Scrip Code: 544100

National Stock Exchange of India Limited ,

Listing Department, Exchange Plaza, Bandra-Kurla Complex, Bandra (E), Mumbai – 400 051

Trading Symbol: NOVAAGRI

SUB: MONITORING AGENCY REPORT FOR THE QUARTER ENDED 30[TH] JUNE, 2024.

Ref: Regulation 32(6) of the SEBI (LODR) Regulations, 2015 read with Regulation 41(4) of SEBI (ICDR) Regulations, 2018.

Dear Sir/Madam,

With reference to the aforesaid cited, attached herewith is the Monitoring Agency Report w.r.t. utilization of proceeds of Initial Public Offer (IPO) of Nova Agritech Limited for the quarter ended 30[th] June, 2024 issued by CARE Ratings Limited, Monitoring Agency appointed by the Company in this regard.

The Monitoring Agency Report is also available on the website of the Company i.e. https://novaagri.in/investor-relations/notices-and-disclosures/.

Please take the same on record and suitably disseminate it to all concerned.

Thanking you!

For Nova Agritech Limited

NEHA Digitally signed by NEHA SONI Date: 2024.08.12 SONI 14:57:08 +05'30'

Neha Soni

Company Secretary & Compliance Officer

Encls: Monitoring Agency Report for the quarter ended 30[th] June, 2024

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No. CARE/HRO/GEN/2024-25/1019

The Board of Directors Nova Agritech Limited

Sy. No. 251/A/1, Singannanguda Village, Mulugu Mandal, Siddipet, Medak, Telangana- 502279

10/08/2024

Dear Sir/Ma’am,

Monitoring Agency Report for the quarter ended 30/06/2024 - in relation to the IPO of Nova Agritech Limited (“the Company”)

We write in our capacity of Monitoring Agency for the Initial Public Offering for the amount aggregating to Rs. 143.81 crore of the Company and refer to our duties cast under Regulation 41 of the Securities & Exchange Board of India (Issue of Capital & Disclosure Requirements) Regulations.

In this connection, we are enclosing the Monitoring Agency Report for the quarter ended 06/30/2024 as per aforesaid SEBI Regulations and Monitoring Agency Agreement dated 12/28/2023.

Request you to kindly take the same on records.

Thanking you,

Yours faithfully,

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Niraj Thorat

Assistant Director [email protected]

CARE Ratings Ltd.

1

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Report of the Monitoring Agency

Name of the issuer: Nova Agritech Limited For quarter ended: 06/30/2024 Name of the Monitoring Agency: CARE Ratings Limited

(a) Deviation from the objects: Nil

(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 there is no conflict of interest in such relationship/interest while monitoring and reporting the utilization of the issue proceeds by the issuer, or while undertaking credit rating or other commercial transactions with the entity.

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.

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Signature: Name and designation of the Authorized Signatory: Niraj Thorat Designation of Authorized person/Signing Authority: Assistant Director

CARE Ratings Ltd.

2

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1) Issuer Details:

Name of the issuer Name of the promoter

Industry/sector to which it belongs

: Nova Agritech Limited : Suraksha Agri Retails (India) Private Limited Yeluri Family Trust Malathi S Kiran Kumar Atukuri : Agriculture (Agri Input Industry)

2) Issue Details

Issue Period : 01/23/2024 to 01/25/2024 Type of issue (public/rights) : Public Fresh Issue Type of specified securities : Equity Shares IPO Grading, if any : Not Applicable Issue size (in crore) : Rs. 112.00 Crore

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 CA certificate*, Bank statements The net proceeds of the issue are
Rs.100.95 crore out of which Rs.40.06
crore was spent as on June 30,2024.		 -
Whether shareholder approval has been obtained in case of
material deviations# from expenditures disclosed in the Offer
Document?		 Not
Applicable		 Not Applicable Not Applicable -
Whether the means of finance for the disclosed objects of the
issue have changed?		 No Not Applicable No -
Is there any major deviation observed over the earlier monitoring
agency reports?		 Not
Applicable		 Not Applicable All the proceeds from Fresh Issue
have been utilized appropriately for
the objectives mentioned in the offer
document.		 -

CARE Ratings Ltd.

3

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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 Government/statutory approvals related to the
object(s)have been obtained?		 Not
Applicable		 Not Applicable Not Applicable -
Whether
all
arrangements
pertaining
to
technical
assistance/collaboration are in operation?		 Not
Applicable		 Not Applicable Not Applicable -
Are there any favorable/unfavorable events affecting the
viabilityof these object(s)?		 No Not Applicable No -
Is there any other relevant information that may materially
affect the decision makingof the investors?		 No Not Applicable No -
  • *Chartered Accountant certificate from NSVR & Associates LLP dated August 08, 2024

Where material deviation may be defined to mean:

a) Deviation in the objects or purposes for which the funds have been raised

b) Deviation in the amount of funds actually utilized by more than 10% of the amount projected in the offer documents.

4) Details of objects to be monitored:

(i) Cost of objects –

Sr.
No		 Item
Head		 Source of information /
certifications considered by
Monitoring Agency for
preparation of report		 Original cost
(as per the
Offer
Document) in
Rs. Crore		 Comments of the Board of Directors Comments of the Board of Directors Comments of the Board of Directors
Revised Cost
in Rs. Crore		 Comments of the Monitoring
Agency		 Reason
for cost
revision		 Proposed
financing
option		 Particulars of -
firm
arrangements
made
1 Investment in subsidiary, Nova
Agri Sciences Private Limited
for
setting-up
a
new
formulationplant		 Chartered Accountant
certificate*, Final Prospectus		 14.20 Not Applicable NA - - -
2 Funding Capital Expenditure by
Company, towards expansion of
existingformulationplant		 Chartered Accountant
certificate*, Final Prospectus		 10.49 Not Applicable NA - - -
3 Funding of working capital
requirement of the company		 Chartered Accountant
certificate*,Final Prospectus		 26.65 Not Applicable NA - - -

CARE Ratings Ltd.

4

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4 Investment in the subsidiary,
Nova Agri Sciences Private
Limited, for funding working
capital requirements.		 Chartered Accountant
certificate*, Final Prospectus		 43.36 Not Applicable NA - - -
5 General corporate purpose Chartered Accountant
certificate*, Final Prospectus		 6.24 Not Applicable As per the offer document, the
original
cost
for
GCP
is
mentioned as Rs 3.13 crore.
However, the company has
clarified that the amount was
erroneously
mentioned
as
Rs.3.13 crore as issue related
expenses pertaining to offer for
sale
(Rs.3.12
crore)
was
considered along with issue
related
expenses
of
IPO.
However, the same was rectified
subsequently and GCP amount
has increased to that extent. The
same was informed to SEBI And a
corrigendum^ has been issued
by the company on direction of
SEBI on January29,2024		 - - -
Total 100.95

*Chartered Accountant certificate from NSVR & Associates LLP dated August 08, 2024.

(ii) Progress in the objects –

CARE Ratings Ltd.

5

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Sr.
No		 Sr.
No		 Item
Head		 Item
Head		 Source of
information /
certifications
considered by
Monitoring
Agency for
preparation of
report		 Comments of the
Board of Directors		 Comments of the
Board of Directors
Amount as
proposed
in the Offer
Document in Rs.
Crore		 Amount utilised in Rs. Crore Total
unutilise		 Comments of the Monitoring
Agency
As at
beginnin
g of the
quarter
in Rs.
Crore		 Reasons
for idle
funds		 Proposed
course of
action
At the d
During the
 end of the amount
quarter in Rs.
 quarter in in Rs.
crore
Crore Rs. Crore
1 Investment in subsidiary,
Nova Agri Sciences Private
Limited for setting-up a
new formulation plant		 CA certificate*,
Bank statements		 14.20 - - - 14.20 Rs. 3.00 crore was supposed to
be spent for the object in
Q4FY24 which the company
has not utilised. However, the
offer document states that if
the proceeds are not utilised
in the respective periods, it
can
be
utilised
in
the
subsequentperiods.		 - -
2 Funding Capital
Expenditure by Company,
towards expansion of
existing formulation plant		 CA certificate*,
Bank statements		 10.49 - - - 10.49 Rs. 2.50 crore was supposed to
be spent for the object in
Q4FY24 which the company
has not utilised. However, the
offer document states that if
the proceeds are not utilised
in the respective periods, it
can
be
utilised
in
the
subsequentperiods.		 - -
3 Funding of working capital
requirement of the
company		 CA certificate*,
Bank statements		 26.65 4.77 12.26 17.03 9.62 On April 06, 2024, Rs 10.00
crore have been transferred
from MA account to CC
account of Nova Agritech
Limited for the working capital
requirement of the company.
On April 19, 2024, Rs 10.00
crore was again transferred		 - -
6 CARE Ratings Ltd.

CARE Ratings Ltd.

6

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Sr.
No		 Item
Head		 Source of
information /
certifications
considered by
Monitoring
Agency for
preparation of
report		 Comments of the
Board of Directors		 Comments of the
Board of Directors
Amount as
proposed
in the Offer
Document in Rs.
Crore		 Amount utilised in Rs. Crore Total
unutilise		 Comments of the Monitoring
Agency
As at
beginnin
g of the
quarter
in Rs.
Crore		 Reasons
for idle
funds		 Proposed
course of
action
At the d
During the
 end of the amount
quarter in Rs.
 quarter in in Rs.
crore
Crore Rs. Crore
from MA account to CC
account of Nova Argritech
Limited out of which Rs 2.26
crore was used for working
capital requirement of the
company
4 Investment in the
subsidiary, Nova Agri
Sciences Private Limited,
for funding working capital
requirements.		 CA certificate*,
Bank statements		 43.36 9.06 7.74 16.80 26.56 In Q1FY25, Rs 16.80 crore was
transferred to OCD account of
the subsidiary company NASPL
from the CC account of NAL
instead of direct transfer from
MA account. Out of received
amount Rs. 15.60 crore was
transferred to CC account of
NASPL
for
their
working
capital requirement.		 - -
5 General corporate purpose CA certificate* 6.23 6.23 - 6.23 0.00 On February 23, 2024, the
company has debited Rs 1.65
crore and on March 05, 2024,
the company has debited Rs
4.58 crore totalling Rs. 6.23
crore for GCP.		 - -
Total 100.95 20.06 20.00 40.06 60.89

*Chartered Accountant certificate from NSVR & Associates LLP dated August 08, 2024.

CARE Ratings Ltd.

7

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(iii) Deployment of unutilized proceeds:

Sr. No. Type of instrument and name of
the entity invested in		 Amount invested Maturity date Earning Return on
Investment (%)		 Market Value as at the
end of quarter
1 Fixed Deposit-Union Bank of India 10.00 28-03-2025 - 7.62 -
2 Fixed Deposit- ICICI Bank 11.89 29-03-2025 - 7.65 -
3 Fixed Deposit-Union Bank of India 10.00 09-10-2024 - 6.50 -
4 Fixed Deposit-Union Bank of India 10.00 10-12-2024 - 7.20 -
5 Fixed Deposit- ICICI Bank 5.10 11-07-2024 - 5.50 -
6 Fixed Deposit- ICICI Bank 5.10 11-08-2024 - 6.00 -
7 Fixed Deposit- ICICI Bank 5.10 11-09-2024 - 6.50 -
8 Balance in IPO monitoringaccount 3.72
9 Balance in Public Issue account 2.42
Total 63.33

Note:

Note:
Unutilized netproceeds Rs 60.89
Issue related expenses to be spent towards IPO Rs 2.22
Issue related expenses towards OFS Rs 0.14
Funds to be transferred to selling shareholder Rs 0.08
Total unutilized amount Rs 63.33

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

Objects Objects Completion Date Completion Date Delay (no. of
days/ months)		 Comments of the Board of
Directors		 Comments of the Board of
Directors
As per the offer
document		 Actual Reason of
delay		 Proposed course of
action
Investment in subsidiary, Nova Agri Sciences Private Limited for setting-up a new
formulationplant		 FY24: Rs 3.00 crore
FY25: Rs 11.20 crore
Nil		 Ongoing - -
FundingCapital Expenditure byCompany,towards expansion of existingformulation FY24: Rs 2.50 crore Nil Ongoing - -
8 CARE Ratings Ltd.

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Objects Completion Date Completion Date Delay (no. of
days/ months)		 Comments of the Board of
Directors		 Comments of the Board of
Directors
As per the offer
document		 Actual Reason of
delay		 Proposed course of
action
plant FY25: Rs 7.99 crore
Funding of working capital requirement of the company FY24: Rs 4.77 crore
FY25: Rs 12.26 crore
FY24: Rs 4.77 crore
FY25: Rs 12.26 crore		 Not Applicable - -
Investment in the subsidiary, Nova Agri Sciences Private Limited, for funding working
capital requirements.		 FY24: Rs 9.06 crore
FY25: Rs 22.03 crore
Rs 16.80 Crore		 Not Applicable - -
General corporatepurpose Rs 6.23 Crore Rs 6.23 Not Applicable - -
  • *The company has not made any investment in subsidiary, NASPL for setting up a new formulation plant and funding capital expenditure by NAL for expansion of its existing facility till Q1FY25. However, the company has indicated that the investments for capex has started from July, 2024 onwards.

5) Details of utilization of proceeds stated as General Corporate Purpose (GCP) amount in the offer document:
Source of information / certifications
Amount
Sr. No Item Head^ considered by Monitoring Agency for Comments of Monitoring Agency Comments of the Board of Directors
in Rs. Crore
preparation of report
1 General Corporate Purpose 6.23 GCP proceeds were utilized towards
working capital requirements of Nova
Agritech Limited.

-
CA certificate*, Bank Statement
Total 6.23

*Chartered Accountant certificate from NSVR & Associates LLP dated August 08, 2024.

^ Section from the offer document related to GCP:

CARE Ratings Ltd.

9

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CARE Ratings Ltd.

10

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Disclaimers to MA report:

a) This Report is prepared by CARE Ratings Ltd (hereinafter referred to as “Monitoring Agency/MA” ). 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 credit-related analyses, normally from issuers or underwriters of the instruments, facilities, securities or from obligors.

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