Jain Resource Recycling Limited has informed stock exchanges about a significant development regarding the Securities and Exchange Board of India (SEBI) penalty imposed on its Managing Director. The Securities Appellate Tribunal (SAT) has granted a conditional stay on the penalty recovery through an order dated January 30, 2026.

Background of the Case

The development follows SEBI's adjudication order dated December 12, 2025, which imposed a penalty on Mr. Kamlesh Jain, Promoter and Managing Director of Jain Resource Recycling Limited. The penalty was related to alleged insider trading activities in the scrip of Reflex Industries Limited. The company had previously disclosed this matter to exchanges on December 16, 2025.

SAT Order Details

The Securities Appellate Tribunal has admitted the appeal filed by Kamlesh Jain challenging SEBI's adjudication order. The key aspects of SAT's January 30, 2026 order include:

Regulatory Compliance and Disclosure

Jain Resource Recycling Limited has made this disclosure under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The company has provided comprehensive details as required under the regulatory framework:

• Communication Type: Order of the Securities Appellate Tribunal - Interim Order granting conditional stay
• Receipt Date: January 30, 2026
• Authority: Securities Appellate Tribunal
• Stay Period: Subject to 50% penalty deposit within four weeks from January 30, 2026

Financial and Operational Impact

The company has clarified that there are no direct financial implications on Jain Resource Recycling Limited, as the appeal has been filed by Kamlesh Jain in his individual capacity as Promoter and Managing Director. The SAT order contains no findings or observations regarding the company's operations, focusing solely on the admission of appeal and conditional stay provisions.

Next Steps and Timeline

The conditional stay remains applicable subject to the deposit of 50% of the penalty amount within four weeks from January 30, 2026. SEBI has been granted six weeks to file its response to the appeal. The matter is scheduled for further hearing on April 23, 2026, when SAT will consider the case's merits and determine the next course of action.

The disclosure was signed by Bibhu Kalyan Rauta, Company Secretary and Compliance Officer, emphasizing the company's commitment to maintaining transparency with stakeholders and regulatory compliance.

Jain Resource Recycling Limited has reported a material deviation in its Initial Public Offer (IPO) proceeds utilization during the quarter ended December 31, 2025, according to a monitoring agency report filed under SEBI regulations. The deviation involves the misuse of funds allocated for general corporate purposes toward promoter loan repayment.

Deviation Details and Regulatory Breach

Crisil Ratings Limited, serving as the monitoring agency under Regulation 41 of SEBI ICDR Regulations, identified that the company utilized Rs 540.00 million out of Rs 986.43 million allocated for General Corporate Purposes (GCP) toward part repayment of an unsecured loan from Mr. Kamlesh Jain, who serves as both promoter and director of the company.

This utilization directly contradicts the "Other Confirmations" section of the prospectus dated September 26, 2025, which explicitly stated that "no part of the net proceeds shall be paid by the Company to its promoters, promoter group, directors, key managerial personnel or senior management or group companies."

IPO Structure and Proceeds Allocation

The company's IPO, conducted from September 24-26, 2025, raised gross proceeds of Rs 5,000.00 million. The monitoring report revealed a revision in the allocation structure due to corrected issue expenses.

The revision occurred due to an inadvertent error in the prospectus where issue expenses were incorrectly calculated by clubbing Fresh Issue and Offer for Sale expenses.

Company's Response and Corrective Actions

The company's Board of Directors acknowledged the deviation, attributing it to an "inadvertent error in routing of funds from the designated IPO account under the GCP head." Management emphasized that the utilization was not intentional and did not aim to confer undue benefits on the promoter.

Key corrective measures implemented include:

• Fund Restoration: Mr. Kamlesh Jain returned the Rs 540.00 million to the company as a loan
• Board Review: The matter was placed before the Audit Committee and Board of Directors
• Regulatory Compliance: Commitment to comply with SEBI regulations including shareholder approval requirements
• Transparency Measures: Disclosure under Regulation 32 of SEBI LODR regulations

Outstanding Loan Balances and Fund Utilization

The monitoring report detailed the company's loan position with the promoter, showing fluctuating balances. The outstanding amounts due to the promoter were Rs 1,818 million as of November 2025, Rs 1,502 million in December 2025, and Rs 2,211 million in January 2026.

The complete utilization of GCP funds during the quarter included:

Regulatory Implications and Future Compliance

The monitoring agency confirmed that shareholder approval was not obtained for this material deviation, which constitutes a regulatory breach. The company must now comply with provisions of Regulations 41 & 59 of SEBI ICDR Regulations, including obtaining requisite shareholder approval and providing exit opportunities for dissenting shareholders.

As of the quarter end, Rs 98.41 million remained unutilized in the public issue account, primarily allocated for pending IPO-related expenses. The company has committed to maintaining transparency and regulatory compliance while safeguarding shareholder interests going forward.