Zen Technologies Limited , a prominent player in the aerospace and defence sector, has recently made significant corporate moves and reported on its fund utilization from a recent Qualified Institutional Placement (QIP).

Promoter Reclassification Application

The company has filed an application to reclassify Mr. Ravi Kumar Midathala from the 'Promoter' category to the 'Public' category of shareholders. This move follows board approval and is in accordance with Regulation 31A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The application was submitted to both the BSE Limited and the National Stock Exchange of India Limited on July 30, 2025.

QIP Fund Utilization

Zen Technologies has also submitted its QIP monitoring report for the quarter ended June 30, 2025, prepared by CRISIL Ratings Limited. The report provides insights into the utilization of funds raised through the QIP:

• Total Funds Raised: The QIP raised Rs 1,000.00 crores, with net proceeds of Rs 979.51 crores.
• Utilization in Q2 2025: During the quarter, the company utilized Rs 57.11 crores of the proceeds.
  • Rs 37.72 crores for working capital requirements
  • Rs 15.36 crores for inorganic growth initiatives

Strategic Acquisitions

As part of its inorganic growth strategy, Zen Technologies has made significant acquisitions:

1. TISA Aerospace Private Limited:

   • Acquired 4,00,000 Compulsory Convertible Debentures (CCDs) for Rs 405.82 lakhs
   • Purchased 54.67% of TISA's equity (206,518 shares) for Rs 249.80 lakhs

2. Vector Technics Private Limited:

   • Paid Rs 879.99 lakhs as first and second call money for 8,143 equity shares
   • Now holds 51% of Vector's equity share capital

Fund Deployment

The unutilized proceeds of Rs 352.29 crores have been strategically deployed:

The monitoring agency reported no deviations from the stated objects of the QIP issue.

Zen Technologies' strategic moves, including the promoter reclassification and the prudent utilization of QIP funds for working capital and acquisitions, demonstrate the company's focus on growth and corporate governance. The investments in TISA Aerospace and Vector Technics align with its inorganic growth strategy, potentially strengthening its position in the aerospace and defence sector.

Zen Technologies , a leading defense training solutions provider, saw its shares plummet nearly 9% over two days, closing at Rs 1,603.00 following the release of its quarterly results. The sharp decline comes amid investor concerns over muted performance and slower order inflows for the company.

Q1 Financial Performance

The company reported consolidated quarterly revenue of Rs 158.22 crore, with a profit after tax (PAT) of Rs 47.75 crore. While these figures represent the company's performance, the market reaction suggests that investors were expecting stronger results.

Order Backlog Concerns

A significant factor contributing to the stock's decline was the shrinking order backlog. Zen Technologies' consolidated order backlog decreased to Rs 754.00 crore from Rs 1,160.00 crore, raising concerns about future growth visibility among investors.

Management Outlook

Despite the market's negative reaction, Zen Technologies' management remains optimistic about future prospects:

• The company expects Rs 650.00 crore in order inflows.
• Management is confident about achieving its Rs 800.00 crore order inflow guidance for the first half of the fiscal year, with Rs 150.00 crore already secured.
• Zen Technologies maintains a debt-free balance sheet, which provides financial flexibility.
• The company has set an ambitious target of cumulative revenue of Rs 6,000.00 crore over the next three financial years.

Analyst Perspectives

Brokerage firms have mixed views on Zen Technologies' stock following the results:

• Nuvama downgraded the stock to 'HOLD' with a target price of Rs 1,800.00.
• ICICI Securities also downgraded to 'HOLD', setting a target price of Rs 1,700.00.
• Elara Capital maintains a more optimistic 'BUY' rating with a target price of Rs 2,225.00.

Investor Communication

In a recent corporate filing, Zen Technologies announced that the recording of its earnings conference call to discuss the financial results for the quarter is now available on the company's website. This move aligns with the company's commitment to transparency and keeping investors informed about its financial performance and future outlook.

As Zen Technologies navigates through these challenging market conditions, investors will be closely watching the company's ability to secure new orders and meet its ambitious revenue targets in the coming quarters.