Jain Resource Recycling Limited Reports Deviation in IPO Proceeds Utilization for Q3 FY26

Jain Resource Recycling Limited has reported a material deviation in its Initial Public Offer (IPO) proceeds utilization during the quarter ended December 31, 2025, according to a monitoring agency report filed under SEBI regulations. The deviation involves the misuse of funds allocated for general corporate purposes toward promoter loan repayment. Deviation Details and Regulatory Breach Crisil Ratings Limited, serving as the monitoring agency under Regulation 41 of SEBI ICDR Regulations, identified that the company utilized Rs 540.00 million out of Rs 986.43 million allocated for General Corporate Purposes (GCP) toward part repayment of an unsecured loan from Mr. Kamlesh Jain, who serves as both promoter and director of the company. Parameter: Details Deviation Amount: Rs 540.00 million Total GCP Allocation: Rs 986.43 million Deviation Range: 50-75% Loan Recipient: Mr. Kamlesh Jain (Promoter & Director) This utilization directly contradicts the "Other Confirmations" section of the prospectus dated September 26, 2025, which explicitly stated that "no part of the net proceeds shall be paid by the Company to its promoters, promoter group, directors, key managerial personnel or senior management or group companies." IPO Structure and Proceeds Allocation The company's IPO, conducted from September 24-26, 2025, raised gross proceeds of Rs 5,000.00 million. The monitoring report revealed a revision in the allocation structure due to corrected issue expenses. Component: Original Amount (Rs million) Revised Amount (Rs million) Gross Proceeds: 5,000.00 5,000.00 Issue Expenses: 658.92 263.57 Net Proceeds: 4,341.08 4,736.43 General Corporate Purposes: 591.08 986.43 The revision occurred due to an inadvertent error in the prospectus where issue expenses were incorrectly calculated by clubbing Fresh Issue and Offer for Sale expenses. Company's Response and Corrective Actions The company's Board of Directors acknowledged the deviation, attributing it to an "inadvertent error in routing of funds from the designated IPO account under the GCP head." Management emphasized that the utilization was not intentional and did not aim to confer undue benefits on the promoter. Key corrective measures implemented include: Fund Restoration: Mr. Kamlesh Jain returned the Rs 540.00 million to the company as a loan Board Review: The matter was placed before the Audit Committee and Board of Directors Regulatory Compliance: Commitment to comply with SEBI regulations including shareholder approval requirements Transparency Measures: Disclosure under Regulation 32 of SEBI LODR regulations Outstanding Loan Balances and Fund Utilization The monitoring report detailed the company's loan position with the promoter, showing fluctuating balances. The outstanding amounts due to the promoter were Rs 1,818 million as of November 2025, Rs 1,502 million in December 2025, and Rs 2,211 million in January 2026. The complete utilization of GCP funds during the quarter included: Purpose: Amount (Rs million) Repayment of Director's Loan: 540.00 Bill Discounting Facility Repayment: 282.50 HDFC Bank Borrowed Funds Repayment: 147.93 Employee Salaries and Wages: 16.00 Total: 986.43 Regulatory Implications and Future Compliance The monitoring agency confirmed that shareholder approval was not obtained for this material deviation, which constitutes a regulatory breach. The company must now comply with provisions of Regulations 41 & 59 of SEBI ICDR Regulations, including obtaining requisite shareholder approval and providing exit opportunities for dissenting shareholders. As of the quarter end, Rs 98.41 million remained unutilized in the public issue account, primarily allocated for pending IPO-related expenses. The company has committed to maintaining transparency and regulatory compliance while safeguarding shareholder interests going forward. Jain Resource Recycling Limited has delivered outstanding unaudited standalone and consolidated financial results for the quarter ended December 31, 2025, demonstrating exceptional growth across all key performance metrics. The company's investor presentation revealed comprehensive strategic initiatives including international expansion plans, copper facility development, and enhanced production capabilities across multiple segments. Outstanding Q3FY26 Financial Performance The company achieved remarkable financial results for the third quarter, showcasing substantial growth in both revenue and profitability metrics compared to the corresponding period of the previous year. Financial Metrics: Q3FY26 Q3FY25 Growth (%) Revenue from Operations: ₹2,676.21 crore ₹1,724.18 crore +55.24% Net Profit: ₹126.90 crore ₹41.73 crore +204.15% Basic EPS: ₹3.68 ₹1.33 +176.69% Total Income: ₹2,684.81 crore ₹1,732.42 crore +54.98% EBITDA: ₹192.00 crore ₹87.40 crore +119.63% EBITDA Margin: 7.20% 5.00% +220 bps Nine Months Performance Overview For the nine months ended December 31, 2025, the company maintained its robust growth trajectory with consolidated revenue reaching ₹6,438.13 crore compared to ₹4,669.36 crore in the corresponding period of the previous year. Nine Months Metrics: 9MFY26 9MFY25 Growth (%) Consolidated Revenue: ₹6,438.13 crore ₹4,669.36 crore +37.88% Consolidated Net Profit: ₹281.40 crore ₹171.00 crore +64.56% EBITDA: ₹449.00 crore ₹272.00 crore +65.07% EBITDA Margin: 7.00% 5.80% +120 bps PAT Margin: 4.40% 3.70% +70 bps Segment-wise Performance Analysis The consolidated segment results revealed strong performance across all three primary business verticals, with Lead & Lead Alloy Ingots and Copper & Copper Ingots showing particularly robust growth during the quarter. Business Segment: Q3FY26 Revenue Q3FY25 Revenue Q3FY26 Volumes (MT) Q3FY25 Volumes (MT) Copper & Copper Ingots: ₹1,619.20 crore ₹909.70 crore 18,882 11,700 Lead & Lead Alloy Ingots: ₹1,032.50 crore ₹798.20 crore 59,726 43,969 Aluminium & Aluminium Alloys: ₹108.10 crore ₹70.70 crore 4,257 2,351 Others: ₹15.43 crore ₹2.13 crore - - Strategic International Expansion and Acquisitions The company announced significant strategic initiatives aimed at strengthening its market position and expanding operations internationally. The board approved the acquisition of a 25% stake in M/s. Abraj Al Khaleej, Kuwait Company, for up to US$ 3.00 million. This acquisition will provide the company with a strategic platform to expand its presence in the Middle East market, leveraging the investee company's established operations, local market knowledge and customer base. Strategic Initiative: Details Kuwait Acquisition: 25% stake in Abraj Al Khaleej for up to US$ 3.00 million Business Focus: Recycling of non-ferrous metals and battery recycling Expected Benefits: Q3FY27 materialization with priority access to recycled materials Completion Timeline: 3 months for acquisition completion Copper Facility Expansion and Joint Venture Jain Resource Recycling Limited entered a Joint Venture with C&Y Group Investments Inc. and incorporated M/s. Jain CY Circular Solutions Private Limited to set up a copper scrap recycling facility in Ahmedabad. The company has already taken a 4-acre premise on lease and commenced machine ordering. Copper Facility Details: Specifications Annual Processing Capacity: 72,000 MT across multiple scrap types Motor/Alternator/Starter Scrap: 36,000 MT Cable Scrap: 24,000 MT Other Copper Scrap: 12,000 MT Expected Output: ~25,000 MT per annum of processed copper Operational Timeline: June 2026 Enhanced Production Capabilities and Value-Added Products The company is progressing well on the Value-Added Copper Products project at Jain Green Technologies – Unit 3, which will significantly expand capabilities across copper anodes, cathodes, wire rods, busbars and coated products. The tin division continues to scale up steadily with enhanced production capacity from 125 MTPA to 500 MTPA through installation of an additional Vacuum Distillation Furnace. Product Development: Capacity Timeline Copper Anode Phase 1: 800 MT/month Q4FY26 Copper Anode Phase 2: +800 MT/month Q1FY27 Copper Cathode Phase 1: 750 MT/month Q1FY27 Copper Wire Rod: 600 MT/month Q1FY27 Tin Production Capacity: 500 MTPA Current Earnings Call Recording Made Available Pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Jain Resource Recycling Limited has made the audio recording of the earnings call held on February 11, 2026 available on the company's website. The earnings call discussed the unaudited financial results for the quarter and nine months ended December 31, 2025. Communication Details: Information Earnings Call Date: February 11, 2026 Website Access: jainmetalgroup.com/results-announcements.php Compliance Officer: Bibhu Kalyan Rauta Stock Exchanges Notified: NSE (JAINREC) and BSE (544537) IPO Fund Utilisation and Compliance Pursuant to Regulation 32 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the company confirmed that there were no deviations or variations in the utilisation of IPO proceeds during the quarter ended December 31, 2025. The statement was duly reviewed by the Audit Committee and Board of Directors at their meeting held on February 09, 2026. IPO Fund Utilisation: Amount (₹ crore) Total Amount Raised: 1,250.00 Fresh Issue: 500.00 Pre-payment of Borrowings: 375.00 General Corporate Purposes: 98.64 Total Funds Utilised: 473.64 Monitoring Agency: CRISIL Limited We’re building Scanx - to help you express your trading & investing idea, to help you analyse the markets better. Stock Markets are the true indicator of the growth of any country's economy. We are bullish on India, we are bullish on India's prospects to be one of largest economies of the world. We believe that Stock Markets provide an unique opportunity for all Indians to participate in the growth story of India. We are enabling the same for Indians. As financial services are becoming more accessible, there is now a large set of Indians today who are financially aware and literate. They value time and seek high quality products & services. 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