True Colors Limited has announced a significant expansion of its renewable energy infrastructure with the development of a new solar power project that will substantially increase its captive energy generation capacity. The initiative represents a strategic move towards enhanced sustainability and operational efficiency in the company's manufacturing operations.

Solar Capacity Expansion Details

The company has initiated development of a solar power project with approximately 2.5 MW capacity for captive consumption. The project is expected to be commissioned starting from June 2026 onwards, subject to completion of applicable regulatory procedures. True Colors Limited has already received renewable energy grid connectivity approval for captive consumption from Dakshin Gujarat Vij Company Limited (DGVCL) for the proposed installation.

Total Solar Infrastructure Overview

Upon completion of the new project, True Colors Limited's comprehensive solar infrastructure will include multiple installations across its facilities. The company currently operates an existing 1 MW rooftop solar power plant and has recently commissioned an additional 1 MW rooftop solar installation.

Expected Energy Generation and Financial Impact

At optimal operating conditions, the company's expanded solar infrastructure is expected to generate approximately 50 lakh units (kWh) of renewable electricity annually. This renewable energy generation is equivalent to approximately ₹4-4.5 crore per year based on prevailing industrial electricity tariffs.

With this capacity expansion, approximately 60% of the company's total energy requirements will be met through solar power. The company notes that while solar installations have potential to contribute towards energy cost optimization over time, the actual financial impact on profitability will depend on multiple operational factors including utilization of generated power, manufacturing capacity utilization, production volumes, and prevailing electricity tariffs.

Strategic Benefits and Long-term Vision

The solar capacity expansion supports True Colors Limited's broader strategy to develop a sustainable, energy-efficient, and scalable manufacturing ecosystem. Key strategic benefits expected from this initiative include:

• Improved long-term energy cost efficiency supporting operating stability in a growing manufacturing environment
• Enhanced energy independence enabling more reliable and uninterrupted manufacturing operations
• Reduction in carbon footprint strengthening alignment with sustainability expectations of global customers and supply chains
• Integration of renewable energy into core manufacturing infrastructure reinforcing long-term competitiveness

As True Colors Limited continues to expand its manufacturing capabilities and strengthen its position within the digital textile printing ecosystem, investments in renewable energy infrastructure are expected to play a strategic role in supporting sustainable growth, operational efficiency, and long-term value creation for stakeholders.

True Colors Limited's quarterly monitoring report for the period ended December 31, 2025, has revealed a regulatory compliance issue concerning the placement of IPO proceeds. The textile company, which raised Rs 108.86 crore through its Initial Public Offer in September 2025, faced scrutiny from its monitoring agency Crisil Ratings Limited over the interim deployment of funds.

Compliance Violation Identified

The monitoring agency flagged that True Colors Limited had parked Rs 20 crore of unutilized IPO proceeds in a fixed deposit with Prime Co-Operative Bank Ltd, which is not included in the Second Schedule of the Reserve Bank of India Act, 1934. This placement violated the interim use of proceeds guidelines as specified in the company's offer document and SEBI ICDR regulations.

IPO Proceeds Utilization Status

Out of the net proceeds of Rs 100.70 crore, True Colors Limited has utilized Rs 73.70 crore during the quarter across its stated objectives. The utilization breakdown shows significant progress in debt repayment and working capital funding.

The company completely utilized the allocated funds for debt repayment and prepayment of borrowings, while partial utilization occurred in working capital funding and general corporate purposes.

Deployment of Unutilized Funds

As of December 31, 2025, the total unutilized amount of Rs 27.00 crore was deployed across three fixed deposits with varying interest rates and maturity periods.

Company's Response and Corrective Action

The Board of Directors clarified that the Rs 20 crore placement was made purely on commercial considerations due to the comparatively higher interest rate offered by the cooperative bank. The company emphasized that the funds remained fully traceable and under company control, with no diversion or utilization for purposes other than stated objectives.

The company stated the placement was made in good faith without malafide intent, under unawareness of the specific regulatory restriction. Upon being informed of the compliance requirement, True Colors Limited immediately withdrew the entire amount, and as of February 13, 2026, the Rs 20 crore was credited back to the designated monitoring account.

Monitoring Agency Assessment

Crisil Ratings Limited, serving as the monitoring agency under SEBI ICDR Regulations, confirmed that proceeds towards the objects of the offer were utilized as per disclosures in the prospectus dated September 26, 2025. However, the agency specifically noted the deviation regarding the cooperative bank placement.

The monitoring report indicated no other major deviations from earlier reports and confirmed that utilization aligned with the offer document requirements, except for the interim placement issue. The company has strengthened internal compliance controls to ensure strict adherence to applicable SEBI and monitoring framework requirements going forward.