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.

Hi-tech pipes Limited, one of India's leading manufacturers of steel tubes, hollow sections, and value-added steel products, has announced the commencement of commercial production at its Sikandrabad Unit-III facility in Uttar Pradesh. This milestone marks a significant achievement in the company's growth trajectory and strengthens its manufacturing presence across North and Central India.

Capacity Expansion Details

The commissioning of the Sikandrabad facility represents a major step forward in Hi-Tech Pipes' expansion strategy. The facility adds substantial manufacturing capacity while enhancing the company's operational flexibility and market reach.

With this new facility, Hi-Tech Pipes has effectively achieved a landmark milestone of 1 million tons of installed annual capacity, reflecting the company's consistent execution and disciplined capital allocation approach.

Strategic Positioning and Benefits

The Sikandrabad facility's strategic location enhances proximity to key consumption centers, delivering multiple operational advantages. The facility improves supply chain efficiency, reduces logistics costs, and enables faster response to customer requirements across infrastructure, construction, water distribution, fabrication, and industrial segments.

The plant is equipped with modern manufacturing technology and process efficiencies, enabling superior quality, scalability, and reliability. This strategic positioning is designed to support improved operating efficiencies, better realization, and stronger operating leverage, contributing to sustained improvement in EBITDA per ton.

Future Expansion Plans

Building on this milestone achievement, Hi-Tech Pipes is progressing toward the next phase of expansion with a clear roadmap to add another 1 million tons of capacity over the medium term. This expansion strategy aligns with the company's vision of building a robust, pan-India, and globally competitive manufacturing platform.

The company's expansion approach focuses on enhancing profitability and margin resilience while addressing evolving customer requirements and supporting long-term profitability metrics.

Market Outlook and Opportunities

The demand outlook for steel pipes and tubes remains strong and structurally positive, supported by several key factors:

• Sustained government-led infrastructure development
• Continued urbanization trends
• Renewable energy investments
• Increased private sector participation

On the global front, recent trade developments such as the US-India and EU-India trade pacts are expected to be structurally supportive for Indian steel product manufacturers, improving export competitiveness and access to international markets.

Management Commentary

Mr. Ajay Kumar Bansal, Chairman and Managing Director of Hi-Tech Pipes Limited, commented on the commissioning: "The commencement of commercial production at our Sikandarabad Greenfield facility is a significant step forward in our growth journey and reinforces our commitment to building a strong, regionally balanced manufacturing network. With this commissioning, we have reached the important milestone of 1 million ton of installed capacity, reflecting our disciplined execution and long-term strategic vision."

He further added: "Sikandarabad has been developed with modern technology and enhanced efficiencies to support our growing focus on value-added steel products and high-demand segments. As we move ahead, we are actively gearing up for the next phase of expansion, targeting an additional 1 million tons of capacity."