Jaykay Enterprises Limited has submitted its monitoring agency report for the quarter ended December 31, 2025 (Q3FY26) to BSE and NSE, in compliance with SEBI regulations. The report, prepared by Acuité Ratings & Research Limited as the appointed monitoring agency, provides a comprehensive overview of the utilization of proceeds from the company's rights issue.

Rights Issue Proceeds Utilization

The monitoring report covers the utilization of proceeds from Jaykay Enterprises' rights issue conducted in August 2024, which raised INR 146.14 crores. As of the quarter ended December 31, 2025, the company has utilized INR 131.27 crores, leaving INR 14.87 crores unutilized.

Object-wise Fund Deployment

The rights issue proceeds were allocated across four main categories, with significant progress reported across all segments:

JK Defence Division

The JK Defence segment received INR 95.04 crores allocation and has utilized INR 91.88 crores. Key expenditures include INR 68.67 crores for loan repayment, INR 13.87 crores for land purchase, and INR 9.14 crores for miscellaneous expenses including regulatory compliance costs.

JK Digital Division

For the JK Digital segment, INR 26.35 crores has been utilized from the allocated INR 14.22 crores. Major utilizations include INR 22.24 crores for plant and machinery purchase and INR 2.65 crores for the center of excellence lab.

General Corporate Expenses

The company has utilized INR 12.15 crores out of the allocated INR 14.22 crores for general corporate purposes.

Revised Cost Structure

The monitoring agency noted that deviations reported in the previous quarter have been resolved through a revised cost structure approved by shareholders at the Annual General Meeting held on September 30, 2025. The original cost allocations were reassessed, with some categories seeing increases due to higher regulatory compliance costs including AS9100D, NADCAP, and DPIIT certifications.

Deployment of Unutilized Funds

The unutilized amount of INR 14.87 crores is deployed as follows:

The company has invested INR 7.82 crores in fixed deposits with State Bank of India, earning returns ranging from 4.90% to 6.25% with varying maturity dates extending up to October 2027.

Compliance and Monitoring

The monitoring agency confirmed that all utilizations are in accordance with the disclosures made in the offer document. No deviations were observed during the quarter, and no government or statutory approvals are required for the stated objects. The report also confirmed that no unfavorable events have been identified that could affect the viability of the projects.

Jaykay Enterprises operates in the aerospace & defense and capital goods sectors, with Mr. Abhishek Singhania as the promoter. The company's monitoring report demonstrates systematic progress in deploying the rights issue proceeds across its strategic business divisions while maintaining regulatory compliance.

Jaykay Enterprises Limited has announced its unaudited financial results for the quarter and nine months ended December 31, 2025, presenting a mixed performance across its standalone and consolidated operations. The company's Board of Directors approved these results at a meeting held on February 13, 2026.

Standalone Financial Performance

The company's standalone operations showed a decline in profitability during Q3FY26. Net profit decreased to ₹173.58 lakh compared to ₹363.19 lakh in the corresponding quarter of the previous year.

For the nine months ended December 31, 2025, standalone net profit reached ₹1,808.71 lakh compared to ₹1,250.33 lakh in the corresponding period last year, showing significant improvement in the year-to-date performance.

Consolidated Financial Results

The consolidated results presented a different picture, with improved performance in the current quarter. Consolidated net profit increased to ₹678.01 lakh in Q3FY26 from ₹538.88 lakh in Q3FY25.

Segment-wise Performance

The company operates through multiple business segments, with varying performance across divisions:

Defence & Aerospace Division:

• Q3FY26 revenue: ₹64.64 lakh (standalone), ₹953.86 lakh (consolidated)
• Nine months FY26: ₹188.19 lakh (standalone), ₹2,527.68 lakh (consolidated)

Digital Manufacturing and Advance Systems:

• Consolidated Q3FY26 revenue: ₹36.06 lakh
• Nine months FY26: ₹53.41 lakh (consolidated)

Digital Service (Consolidated only):

• Q3FY26 revenue: ₹5,007.38 lakh
• Nine months FY26: ₹15,268.12 lakh

Auditor Concerns and Key Issues

The independent auditor's review report highlighted several significant concerns that resulted in a qualified conclusion:

Misappropriation of Funds:

• Ex-director of subsidiary Neumesh Labs Private Limited misappropriated funds and trade receivables worth ₹152.99 lakh (standalone) and ₹5,045.34 lakh (consolidated)
• FIR filed on June 13, 2025 against the ex-director
• Management has not made provision for expected credit loss, hoping for full recovery through legal proceedings

Inventory Valuation Issues:

• Closing work-in-progress inventory of ₹357.65 lakh not valued according to Ind AS-2
• Inventories valued at cost instead of lower of cost or net realizable value

Regulatory Considerations

The company faces potential regulatory implications under Section 45-IA of the Reserve Bank of India Act, 1934, as financial assets constitute more than 50% of total assets and income from financial assets exceeds 50% of gross income. However, management maintains that registration is not required since the company's primary business involves digital manufacturing, software development, and aerospace manufacturing, with investments mainly in wholly-owned subsidiaries.

Rights Issue Utilization

The company provided detailed utilization of ₹14,614.42 lakh raised through rights issue, with significant allocations to subsidiaries JK Defence & Aerospace Limited and JK Digital and Advance Systems Private Limited for plant and machinery purchases, land acquisition, and loan repayments.

Exceptional Items

Consolidated results included exceptional items of ₹447.56 lakh related to additional provisions for gratuity and leave encashment due to changes in Labour Code definitions notified by the Government of India on November 21, 2025.