Cyient DLM Limited has issued a postal ballot notice seeking shareholder approval for the variation in utilization of Initial Public Offering (IPO) proceeds. The company proposes to reallocate Rs. 36.85 crores from capital expenditure requirements to incremental working capital needs, representing a strategic shift in fund deployment based on evolving business requirements.

IPO Proceeds Reallocation Details

The proposed variation involves reallocating Rs. 36.85 crores from "Funding Capital Expenditure of our Company" to "Funding Incremental Working Capital Requirements of our Company." This amount represents approximately 6.2% of the total IPO proceeds of Rs. 592.66 crores raised through the fresh issue of 2,23,64,653 equity shares in FY 2023-24.

Current Utilization Status

As of December 31, 2025, the company has achieved significant progress in utilizing IPO proceeds across various objectives. The working capital requirements have been 97.18% utilized with Rs. 8.22 crores remaining unutilized, while capital expenditure utilization stands at 15.43% with Rs. 36.85 crores remaining unused.

Strategic Rationale for Reallocation

The company cited several factors driving the proposed reallocation. Global electronics manufacturing landscape changes since the July 2023 IPO have impacted export markets through tariff-related developments and supply chain realignments. These shifts have caused global OEMs to reassess expansion timelines and capital deployment plans.

Concurrently, Cyient DLM has experienced healthy operational growth with increased customer mandates across Build to Print (B2P) and Build to Specification (B2S) offerings. This growth has expanded working capital needs for procurement cycles, inventory buildup, and timely customer fulfillment beyond original projections.

The acquisition of US entity Altek has further increased short-term working capital requirements for integration-related operational commitments including inventory alignment and transitional support.

Postal Ballot Process

The postal ballot will be conducted through remote e-voting in compliance with Ministry of Corporate Affairs and SEBI circulars. KFin Technology Limited has been engaged to facilitate the remote e-voting process.

Mr. Manish Kumar Singhania, Practicing Company Secretary (ACS 22056), has been appointed as scrutinizer for conducting the postal ballot process in a fair and transparent manner.

Financial Impact and Risk Considerations

The proposed reallocation is expected to have a favorable impact on the company's financial position by strengthening operational capabilities and reducing dependence on external short-term financing. Enhanced working capital availability will enable timely component procurement, adequate inventory maintenance, and uninterrupted customer commitment fulfillment.

However, the company has identified potential risks including actual business expansion varying from current growth assumptions and possible deployment in lower margin business segments. The variation falls within regulatory thresholds under SEBI ICDR provisions, with no exit offer obligations applicable as the reallocation represents less than 25% of total IPO proceeds.

Regulatory Compliance

The proposed variation complies with Sections 13(8) and 27 of the Companies Act, 2013, and SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018. The postal ballot notice has been sent to all members whose email addresses are registered with the company, depositories, or registrar as of the cut-off date.

Nippon India Mutual Fund has disclosed the sale of shares in Cyient DLM Limited under regulatory compliance requirements, reducing its shareholding position in the engineering services company.

Transaction Details

The mutual fund sold 75,000 shares of Cyient DLM Limited through open market transactions conducted between January 21, 2025, and January 29, 2026. This sale represents 0.09% of the company's total share capital.

Shareholding Changes

Following the transaction, Nippon India Mutual Fund's stake in Cyient DLM Limited has been reduced from 6.49% to 6.39%. The fund's shareholding decreased from 51,47,763 shares to 50,72,763 shares.

Company Information

Cyient DLM Limited's shares are listed on both the National Stock Exchange of India Limited and BSE Limited. The company's total equity share capital remains unchanged at Rs. 79,36,43,960, consisting of 7,93,64,396 shares with a face value of Rs. 10 per share.

Regulatory Compliance

The disclosure was made pursuant to Regulation 29(2) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011. Nippon India Mutual Fund confirmed that it does not belong to the promoter or promoter group of Cyient DLM Limited. The fund operates through Nippon Life India Trustee Limited and is managed by Nippon Life India Asset Management Limited.

The transaction represents a routine portfolio adjustment by the mutual fund, with the shareholding remaining above the 5% threshold that requires regulatory disclosure under SEBI regulations.