DSM Fresh Foods Limited has announced the withdrawal of shareholders' approval for variation in the utilization of Initial Public Offering (IPO) proceeds, following a board meeting held on 24th February, 2026. The decision reflects the company's commitment to transparent governance and addresses concerns raised by dissenting shareholders.

Original Shareholders' Approval Details

The shareholders had previously approved a variation in IPO proceeds utilization through a Special Resolution passed on 06th February, 2026. The voting pattern and financial details of the approved variation are outlined below:

The approved reallocation was intended for "Funding expenditure for inorganic growth through acquisitions and other strategic initiatives" and "General Corporate Purpose" to align with the company's growth strategy and business requirements.

Regulatory Compliance and Shareholder Engagement

Under Schedule XX of SEBI(ICDR) Regulations, 2018, dissenting shareholders representing more than 10% of voting shareholders were entitled to an exit opportunity. The company formally reached out to these shareholders to explain the exit mechanism, including applicable processes, timelines, and regulatory framework.

Notably, four out of five dissenting shareholders confirmed in writing that they would not exercise the exit option, expressing continued confidence in the management and growth strategy. Despite this support, the board decided to prioritize transparent governance practices.

Board Decision and Rationale

After detailed deliberations and consideration of representations from dissenting shareholders, the board approved the withdrawal of the shareholders' approval for IPO proceeds variation. The decision demonstrates the company's commitment to adopting prudent and transparent governance approaches in the best interests of all stakeholders.

Impact and Future Compliance

With the withdrawal of the proposed variation, DSM Fresh Foods Limited will continue utilizing IPO proceeds strictly according to the original objects disclosed in the Prospectus dated 07th October, 2025. This ensures full compliance with:

• Companies Act, 2013 provisions
• SEBI LODR Regulations
• Other applicable laws and regulations

The withdrawal eliminates the requirement for providing exit opportunities to shareholders under Section 27 of the Companies Act, 2013, as the provisions relating to such exit opportunities are no longer applicable. This decision reinforces the company's commitment to maintaining investor confidence while adhering to regulatory requirements and governance best practices.

DSM Fresh Foods Limited has announced a comprehensive seafood sourcing and production strategy, establishing a structured alliance with 300 farmers in Kanpur, Uttar Pradesh, while signing a memorandum of understanding for developing an integrated aquaculture platform. The technology-enabled fresh protein platform, operating under the ZappFresh brand, aims to strengthen its backward integration strategy within the seafood category to drive margin expansion and supply control.

Structured Farmer Alliance Framework

The company has formalised a structured procurement framework through partnerships with PVR Aqua Producer Co. Ltd., a 300-member Fish Farmer Producer Organisation (FPO), and Bahudeshiya Matsya Jivi Sahkari Samiti Ltd., Dahawa, a registered fish cooperative. This arrangement provides DSM with priority access to aggregated production from approximately 300 farmers on an immediate basis.

Under this structured arrangement, production planning and harvest cycles will be aligned with DSM demand, while pricing structures will follow pre-agreed benchmark-linked frameworks, reducing exposure to traditional mandi systems. The company will implement quality, feed, and yield protocols to standardise output across the farmer network.

Integrated Aquaculture Development Project

DSM has signed an MoU for the development of approximately 120 acres of aquaculture land at Aurangapur Sambhi, Bhilol Tehsil, District Kanpur. The integrated facility is designed with an annual production capacity of ~500 tons, focusing on freshwater fish farming with scalable pond infrastructure.

The capex deployment will be phased and subject to detailed project report (DPR) completion, due diligence, and regulatory approvals. Direct farming integration, once stabilised, is expected to deliver 200-300 basis points gross margin expansion in the seafood vertical compared to current open-market sourcing benchmarks.

Strategic Revenue Mix Transformation

Seafood currently contributes approximately ~20% of DSM's revenue mix in H1FY26. The company intends to scale seafood contribution to ~30% over the medium term, positioning it as a core growth and profitability driver. This expansion strategy aims to create meaningful blended gross margin improvement and operating leverage benefits while reducing earnings volatility associated with commodity-led sourcing.

The integrated aquaculture platform also unlocks additional monetisation pathways beyond captive retail sourcing, including direct B2B institutional fish supply, HoReCa partnerships, private label seafood processing, and potential export-oriented fish trading opportunities over time.

Management Perspective and Strategic Alignment

Managing Director Deepanshu Manchanda commented on the development, stating that seafood is transitioning from a complementary category to a strategic growth engine for the company. He emphasised that the partnership with the 300-farmer FPO provides procurement discipline, while the Kanpur aquaculture development builds long-term structural control.

The initiative aligns with the Government of India's focus on fisheries modernisation, aquaculture expansion, and farmer income enhancement. By formalising supply chains through FPO integration and structured production planning, DSM contributes to rural employment generation and income stability for participating farmers while enhancing protein accessibility.

Replication of Proven Integration Model

DSM previously strengthened supply control and cost efficiency in poultry through contract farming integration. The Kanpur aquaculture initiative applies a similar integration framework within seafood, combining asset-light farmer aggregation with asset-backed farming infrastructure. This dual structure balances near-term procurement efficiency with long-term structural control, positioning DSM as an upstream-integrated seafood platform participant rather than purely a protein retailer.