Hi-tech pipes Limited has announced the acquisition of 100% stake in Sain Software Systems Private Limited for Rs. 25.77 crore, following board approval on 31-03-2026. The acquisition was approved based on the recommendation of the Audit Committee and will result in Sain Software becoming a wholly owned subsidiary of the company.

Acquisition Details

The acquisition is structured as a cash transaction valued at Rs. 25.77 crore, based on a valuation report from an independent registered valuer. The primary objective is to acquire land and building owned by the target company for use as office premises to support current operational and future administrative requirements.

Target Company Profile

Sain Software Systems Private Limited is incorporated under the Companies Act, 2013 with its registered office at A-455, Basement, Defence Colony, New Delhi, 110020. The company was incorporated on 16/09/2006 and is engaged in providing information technology services.

Financial Structure

Revenue Performance

The target company has reported nil turnover for the past three financial years:

Strategic Rationale

The acquisition serves multiple strategic purposes for Hi-Tech Pipes. The primary objective is to secure office premises for captive use, providing long-term strategic value and efficient resource utilization. Post-acquisition, the target company will be rebranded and aligned with Hi-Tech Pipes' steel pipe business operations to achieve better operational synergy and brand consistency.

Related Party Considerations

Except for the directorship of Mr. Ajay Kumar Bansal in the target company, there are no other interests in Sain Software Systems. The proposed acquisition is being undertaken on an arm's length basis, ensuring compliance with regulatory requirements.

Regulatory Compliance

The disclosure was made pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. No governmental or regulatory approvals are required for this acquisition, and the transaction is expected to be completed immediately or within a maximum period of 90 days.

Hi-Tech Pipes Limited has received a monitoring agency report from CRISIL Ratings Limited for the quarter ended December 31, 2025, regarding the utilization of proceeds from its Qualified Institutional Placement (QIP). The report, issued under Regulation 173A of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, highlights a significant deviation in the deployment of unutilized funds.

QIP Issue Details and Fund Utilization

The company's QIP, conducted from October 07, 2024, to October 11, 2024, raised gross proceeds of Rs 5,007.89 million with net proceeds of Rs 4,732.89 million. The funds were allocated across three primary objectives:

Deviation in Fund Deployment

CRISIL has flagged a deviation in the company's deployment of unutilized proceeds. The monitoring agency noted that Hi-Tech Pipes invested Rs 560.19 million in "The Wealth Company Flexi Cap Fund," an equity mutual fund vulnerable to fluctuations in equity share prices. This investment contradicts the placement document's disclosure, which stated that unutilized funds would be deposited in scheduled commercial banks or temporarily invested in creditworthy instruments, including money market/mutual funds.

The report emphasizes that this equity mutual fund investment carries inherent risks, with the possibility that the principal value may decline below the invested amount if the fund's performance deteriorates.

Manufacturing Expansion Progress

During the quarter ended December 31, 2025, the company utilized Rs 289.81 million towards funding capital expenditure for manufacturing expansion. The expansion includes:

• Brownfield project: Expansion at existing Sanand, Gujarat unit with new Direct Forming Technology (DFT) Line of 100,000 MTPA capacity
• Greenfield project: New manufacturing unit at Sri City, Andhra Pradesh with DFT Line of 90,000 MTPA capacity and ERW plant of 30,000 MTPA capacity

The company changed several vendors for machinery purchases during the quarter due to operational and strategic reasons, which was approved by the Board of Directors on August 08, 2025.

Board Response and Corrective Measures

The Board of Directors has acknowledged CRISIL's observations and initiated appropriate measures for withdrawal of the equity mutual fund investment. The Board noted that as of February 11, 2026, the market value of the investment stood at Rs 569.86 million against the invested amount of Rs 560.19 million, with the principal amount remaining intact. The company has committed to redeploying the funds as per the offer document guidelines and prevailing regulations.

Regulatory Compliance

The monitoring report confirms that proceeds towards the stated objectives were utilized as per the placement document disclosures. However, the deviation in interim fund deployment has been specifically highlighted as non-compliant with the original disclosures. CRISIL has based its assessment on statutory auditor certificates, management undertakings, bank statements, and the final placement document dated October 11, 2024.