HFCL/SEC/24-25 May 03, 2024

BSE Ltd. National Stock Exchange of India Ltd.

1st Floor, New Trading Wing, Rotunda Building Exchange Plaza, 5th Floor, C – 1, Block G
Phiroze Jeejeebhoy Towers, Dalal Street, Fort Bandra – Kurla Complex, Bandra (E)
Mumbai – 400001 Mumbai – 400051
[email protected] [email protected]
Security Code No.: 500183 Security Code No.: HFCL

RE: Regulation 32(6) of the Securities and Exchange Board of India (Listing Obligations and Disclosure
Requirements) Regulations, 2015 (“SEBI Listing Regulations”).

Subject: Monitoring Agency Report on the utilisation of proceeds raised through Qualified Institutions
Placement for the Quarter ended March 31, 2024

Dear Sir(s)/ Madam,

We would like to inform that the Company had raised funds by way of allotment of 5,10,14,491 (Five Crores Ten
Lakhs Fourteen Thousand Four Hundred and Ninety One) equity shares of face value of Re.1/- each, to qualified
institutional buyers ("QIBs"), at a price of Rs.69/- per Equity Share (including premium of Rs.68/- per Equity
Share), pursuant to the resolution passed by the Board of Directors dated September 02, 2022, special resolution
passed by the Shareholders at their 35th Annual General Meeting (AGM) held on 30th September, 2022, the
preliminary placement document dated August 28, 2023, the placement document dated August 31, 2023 and
resolution of the Fund Raising Committee of the Board of Directors dated August 31, 2023 (the “Issue”).

In terms of Regulations 32(6) of the SEBI Listing Regulations read with Regulation 173A(4) of the SEBI (Issue of
Capital and Disclosure Requirements) Regulations, 2018 ("SEBI ICDR Regulations"), please find enclosed the
Monitoring Agency Report issued by CARE Ratings Limited, Monitoring Agency, appointed to monitor the
utilisation of proceeds raised through issuance of equity shares by way of Qualified Institutions Placement.

You are requested to take the above information on records and disseminate the same on your respective websites.

Thanking you.

Yours faithfully,
For HFCL Limited
Manoj Digitally signed
by Manoj Baid

Baid
Date: 2024.05.03
16:18:19 +05'30'
(Manoj Baid)
President & Company Secretary
Encl.: Monitoring Agency Report

Regd. Office & Works: 8, Electronics Complex, Chambaghat, Solan-173213 (H.P.) Tel: (01792) 230644, 230645, 230647 Fax: (01792) 231902
Corporate Identity Number: L64200HP1987PLC007466
No. CARE/NRO/RL/2024-25/1106

The Board of Directors

HFCL Limited
8, Commercial Complex,
Masjid Moth,
Greater Kailash – II,
New Delhi – 110048,
India
May 03, 2024

Dear Sir/Ma’am,

Monitoring Agency Report for the quarter ended March 31, 2024 - in relation to the Qualified
Institutions Placement of Equity Shares of HFCL Limited (“the Company”)

We write in our capacity of Monitoring Agency for the Qualified Institutions Placement of Equity shares for the
amount aggregating to Rs. 352.00 crore of the Company and refer to our duties cast under Regulation 173A of
the Securities & Exchange Board of India (Issue of Capital & Disclosure Requirements) Regulations 2018.

In this connection, we are enclosing the Monitoring Agency Report for the quarter ended March 31, 2024, as
per aforesaid SEBI Regulations and Monitoring Agency Agreement dated August 28, 2023.

Request you to kindly take the same on records.

Thanking you,
Yours faithfully,

Ravleen Sethi
Associate Director
[email protected]

CARE Ratings Limited

9th floor, C-001/A2, Berger Towers, Sector 16B, 4th Floor, Godrej Coliseum, Somaiya Hospital Road,
Noida, Off Eastern Express Highway, Sion (East), Mumbai -
Gautam Budh Nagar, Uttar Pradesh -201301 400 022
Phone: +91-120-4452000 Phone: +91-22-6754 3456
Email: [email protected] • www.careedge.in
CIN-L67190MH1993PLC071691
Report of the Monitoring Agency (MA)
Name of the issuer: HFCL Limited
For quarter ended: March 31, 2024
Name of the Monitoring Agency: CARE Ratings Limited
(a) Deviation from the objects: Nil
(b) Range of Deviation: Not applicable

Declaration:
We declare that this report provides an objective view of the utilization of the issue proceeds in relation to the
objects of the issue based on the information provided by the Issuer and information obtained from sources
believed by it to be accurate and reliable. The MA does not perform an audit and undertakes no independent
verification of any information/ certifications/ statements it receives. This Report is not intended to create any
legally binding obligations on the MA which accepts no responsibility, whatsoever, for loss or damage from the
use of the said information. The views and opinions expressed herein do not constitute the opinion of MA to
deal in any security of the Issuer in any manner whatsoever. Nothing mentioned in this report is intended to
or should be construed as creating a fiduciary relationship between the MA and any issuer or between the
agency and any user of this report. The MA and its affiliates also do not act as an expert as defined under
Section 2(38) of the Companies Act, 2013.

The MA or its affiliates may have credit rating or other commercial transactions with the entity to which the
report pertains and may receive separate compensation for its ratings and certain credit related analyses. We
confirm that there is no conflict of interest in such relationship/interest while monitoring and reporting the
utilization of the issue proceeds by the issuer, or while undertaking credit rating or other commercial
transactions with the entity.

We have submitted the report herewith in line with the format prescribed by SEBI, capturing our comments,
where applicable. There are certain sections of the report under the title “Comments of the Board of Directors”,
that shall be captured by the Issuer’s Management / Audit Committee of the Board of Directors subsequent to
the MA submitting their report to the issuer and before dissemination of the report through stock exchanges.
These sections have not been reviewed by the MA, and the MA takes no responsibility for such comments of
the issuer’s Management/Board.

Signature:
Name and designation of the Authorized Signatory: Ravleen Sethi
Designation of Authorized person/Signing Authority: Associate Director

CARE Ratings Limited

9th floor, C-001/A2, Berger Towers, Sector 16B, 4th Floor, Godrej Coliseum, Somaiya Hospital Road,
Noida, Off Eastern Express Highway, Sion (East), Mumbai -
Gautam Budh Nagar, Uttar Pradesh -201301 400 022
Phone: +91-120-4452000 Phone: +91-22-6754 3456
Email: [email protected] • www.careedge.in
CIN-L67190MH1993PLC071691
1) Issuer Details:
Name of the issuer : HFCL Limited
Name of the promoter : Mr. Mahendra Nahata
Industry/sector to which it belongs : Telecommunications - Telecom Equipment & accessories

2) Issue Details
Issue Period : August 28, 2023 to August 31, 2023
Type of issue (public/rights) : Private placement
Type of specified securities : Equity Shares
IPO Grading, if any : Not applicable
Issue size (in Rs. crore) : Rs. 352.00 crore (Note 1)*

*Note 1:
The company had offered 5,10,14,491 Equity Shares, aggregating to Rs. 352.00 crore. A minimum of 10.00% of the Issue Size, i.e., at least
51,01,449 Equity Shares were made available for allocation to Mutual Funds only and the balance 4,59,13,042 Equity Shares were made
available for allocation to all eligible QIBs, including Mutual Funds.

Particulars Remarks

Total shares issued and subscribed as part of Qualified Institutions Placement 5,10,14,491

Total subscriptions towards Qualified Institutions Placement (in Rs. Crore) 352.00

Details of expenses incurred related to issue (in Rs. Crore) 9.50*

Net Proceeds of Qualified Institutions Placement (Rs. Crore) 342.50
* As outlined in the placement document, the anticipated expenses for the issue were projected at Rs. 9.50 crore. However, the expenses incurred as of
December 31, 2023, amounted to Rs. 9.31 crore. The remaining Rs. 0.19 crore, initially held in escrow, was transferred to the monitoring account in Q3FY24.
Subsequently, the company utilized this sum as General Corporate Purposes (GCP) during the quarter ended March 31, 2024, in accordance with the placement
document.

CARE Ratings Limited

9th floor, C-001/A2, Berger Towers, Sector 16B, 4th Floor, Godrej Coliseum, Somaiya Hospital Road,
Noida, Off Eastern Express Highway, Sion (East), Mumbai -
Gautam Budh Nagar, Uttar Pradesh -201301 400 022
Phone: +91-120-4452000 Phone: +91-22-6754 3456
Email: [email protected] , www.careedge.in
CIN-L67190MH1993PLC071691
 3) Details of the arrangement made to ensure the monitoring of issue proceeds:
Source of information / Comment
certifications considered Comments of the s of the
Particulars Reply
by Monitoring Agency for Monitoring Agency Board of
preparation of report Directors
The net proceeds of the issue were Rs. 342.50 crore which
were transferred to MA account initially out of the QIP
proceeds.
As per the placement document the net proceeds from the
Qualified Institutions Placement of Equity shares have to be
utilized as per objects given in the offer document.
Rs 268.21 crore in total has been spent so far by the company
Chartered Accountant till March 2024 out of which Rs. 267.3 crore were already spent
Whether all utilization is as per the disclosures in
Yes certificate*, Bank statement by the company till Q3FY24.
the Offer Document?
and Placement Document During Q4FY24, the company has spent Rs 0.38 crore on
Research & Development (R&D) expenditure and Rs 0.53
crores (including Rs 0.19 crore out of issue proceeds) on GCP.
The unutilized balance as of March 31, 2024, amounts to Rs
76.91 crore, comprising Rs 2.43 crore as interest earned on
FD. This balance is held in fixed deposits with SBI Bank,
totalling Rs 76.87 crore, while the remaining Rs 0.04 crore is
in a monitoring account with SBI Bank.
Whether shareholder approval has been obtained
in case of material deviations# from expenditures Not applicable Not applicable Not applicable
disclosed in the Offer Document?
Whether the means of finance for the disclosed
Not applicable Not applicable Not applicable
objects of the issue have changed?
Is there any major deviation observed over the
Not applicable Not applicable Not applicable
earlier monitoring agency reports?
Whether all Government/statutory approvals
Not applicable Not applicable Not applicable
related to the object(s) have been obtained?
Whether all arrangements pertaining to technical
Not applicable Not applicable Not applicable
assistance/collaboration are in operation?
Are there any favorable/unfavorable events
No Not applicable Not applicable
affecting the viability of these object(s)?

CARE Ratings Limited

9th floor, C-001/A2, Berger Towers, Sector 16B, 4th Floor, Godrej Coliseum, Somaiya Hospital Road,
Noida, Off Eastern Express Highway, Sion (East), Mumbai -
Gautam Budh Nagar, Uttar Pradesh -201301 400 022
Phone: +91-120-4452000 Phone: +91-22-6754 3456
Email: [email protected] , www.careedge.in
CIN-L67190MH1993PLC071691
 Source of information / Comment
certifications considered Comments of the s of the
Particulars Reply
by Monitoring Agency for Monitoring Agency Board of
preparation of report Directors
Is there any other relevant information that may
materially affect the decision making of the No Not applicable Not applicable
investors?
* Chartered Accountant certificate from Oswal Sunil & Company dated April 20, 2024
#Where material deviation may be defined to mean:
a) Deviation in the objects or purposes for which the funds have been raised
b) Deviation in the amount of funds actually utilized by more than 10% of the amount projected in the offer documents.

4) Details of objects to be monitored:

(i) Cost of objects –
Comments of the Board of Directors
Source of information / Original cost Comments
Particulars of -
Sr. Item certifications considered by (as per the Offer Revised Cost of the Proposed
Reason for firm
No Head Monitoring Agency for Document) in in Rs. Crore Monitoring financing
cost revision arrangements
preparation of report Rs. Crore Agency option
made

Chartered Accountant
1 Capital Expenditure certificate*, Bank statement 75.00 NA NA
and Placement Document

Chartered Accountant
Research and certificate*, Bank statement
2 and Placement Document 85.00 NA NA
Development Expenditure

Chartered Accountant
Repayment/Prepayment certificate*, Bank statement
3 and Placement Document 74.04 NA NA
of Short term borrowings

CARE Ratings Limited

9th floor, C-001/A2, Berger Towers, Sector 16B, 4th Floor, Godrej Coliseum, Somaiya Hospital Road,
Noida, Off Eastern Express Highway, Sion (East), Mumbai -
Gautam Budh Nagar, Uttar Pradesh -201301 400 022
Phone: +91-120-4452000 Phone: +91-22-6754 3456
Email: [email protected] , www.careedge.in
CIN-L67190MH1993PLC071691
 Comments of the Board of Directors
Source of information / Original cost Comments
Particulars of -
Sr. Item certifications considered by (as per the Offer Revised Cost of the Proposed
Reason for firm
No Head Monitoring Agency for Document) in in Rs. Crore Monitoring financing
cost revision arrangements
preparation of report Rs. Crore Agency option
made
Chartered Accountant
Funding Working Capital certificate*, Bank statement
4 and Placement Document 75.00 NA NA
requirements

Chartered Accountant
General corporate
5 certificate*, Bank statement 33.46 NA NA
purposes
and Placement Document

Total 342.50^
* Chartered Accountant certificate from Oswal Sunil & Company dated April 20, 2024
^ As outlined in the placement document, the anticipated expenses for the issue were projected at Rs. 9.50 crore. However, the expenses incurred as of December 31, 2023,
amounted to Rs. 9.31 crore. The remaining Rs. 0.19 crore, initially held in escrow, was transferred to the monitoring account in Q3FY24. Subsequently, the company utilized this
sum as General Corporate Purposes (GCP) during the quarter ended March 31, 2024, in accordance with the placement document.

(ii) Progress in the objects –

Source of Comments of the
Amount utilised in Rs. Crore
information/ Board of Directors
certifications Amount
Sr. Item considered by proposed As at At the Unutilised Comments of the Monitoring
During Reasons Proposed
No Head Monitoring in the Offer beginning end of amount Agency
the for idle course of
Agency for Document of the the
quarter funds action
preparation of quarter quarter
report
Chartered Out of the total amount, which
Accountant was apportioned for this head,
Capital certificate*, Bank Rs 2.50 crore has been spent
1 75.00 2.50 - 2.50 72.50
Expenditure statements, in Q2FY24 and there was no
Placement expenditure done in Q3 & Q4
Document FY24 under this head.

CARE Ratings Limited

9th floor, C-001/A2, Berger Towers, Sector 16B, 4th Floor, Godrej Coliseum, Somaiya Hospital Road,
Noida, Off Eastern Express Highway, Sion (East), Mumbai -
Gautam Budh Nagar, Uttar Pradesh -201301 400 022
Phone: +91-120-4452000 Phone: +91-22-6754 3456
Email: [email protected] , www.careedge.in
CIN-L67190MH1993PLC071691
 Source of Comments of the
Amount utilised in Rs. Crore
information/ Board of Directors
certifications Amount
Sr. Item considered by proposed As at At the Unutilised Comments of the Monitoring
During Reasons Proposed
No Head Monitoring in the Offer beginning end of amount Agency
the for idle course of
Agency for Document of the the
quarter funds action
preparation of quarter quarter
report
Out of the total spent which
was apportioned for this head,
Rs 82.64 crore has been spent
Chartered
till Q3FY24 and Rs 0.38 crore
Accountant
Research and during Q4FY24.
certificate*,Bank
2 Development 85.00 82.64 0.38 83.02 1.98 The total spent of Rs 0.38
statements,
Expenditure crores through CC account, is
Placement
made by maturing FD worth
Document
Rs 0.91 crore which was made
out of un-utilized money of
the issue proceeds.
Chartered
Repayment/ Accountant The total amount which was
Prepayment of certificate*,Bank apportioned for this head Rs
3 74.04 74.04 - 74.04 0.00
Short term statements, 74.04 crores has been spent
borrowings Placement in Q2FY24 itself.
Document
Chartered
Accountant The Total amount which was
Funding
certificate*,Bank apportioned for this head Rs
4 Working Capital 75.00 75.00 - 75.00 0.00
statements, 75 crores has been spent in
requirement
Placement Q2FY24 itself.
Document
Chartered Out of the total spent which
Accountant was apportioned for this head,
General
certificate*,Bank Rs 33.12 crore has been spent
5 Corporate 33.46 33.12 0.53 33.65^ 0.00
statements, till Q3FY24 and Rs 0.53 crores
Purposes
Placement has been spent in Q4FY24
Document (including Rs 0.19 crore of

CARE Ratings Limited

9th floor, C-001/A2, Berger Towers, Sector 16B, 4th Floor, Godrej Coliseum, Somaiya Hospital Road,
Noida, Off Eastern Express Highway, Sion (East), Mumbai -
Gautam Budh Nagar, Uttar Pradesh -201301 400 022
Phone: +91-120-4452000 Phone: +91-22-6754 3456
Email: [email protected] , www.careedge.in
CIN-L67190MH1993PLC071691
 Source of Comments of the
Amount utilised in Rs. Crore
information/ Board of Directors
certifications Amount
Sr. Item considered by proposed As at At the Unutilised Comments of the Monitoring
During Reasons Proposed
No Head Monitoring in the Offer beginning end of amount Agency
the for idle course of
Agency for Document of the the
quarter funds action
preparation of quarter quarter
report
unutilized issue proceeds).
The total spent of Rs 0.53
crores through CC account, is
made by maturing FD worth
Rs 0.91 crore which was made
out of un-utilized money of
the issue proceeds.

Total 342.50 267.30 0.91 268.21^ 74.48

* Chartered Accountant certificate from Oswal Sunil & Company dated April 20, 2024
^ As outlined in the placement document, the anticipated expenses for the issue were projected at Rs. 9.50 crore. However, the expenses incurred as of December 31, 2023,
amounted to Rs. 9.31 crore. The remaining Rs. 0.19 crore, initially held in escrow, was transferred to the monitoring account in Q3FY24. Subsequently, the company utilized this
sum as General Corporate Purposes (GCP) during the quarter ended March 31, 2024, in accordance with the placement document.

(iii) Deployment of unutilized qualified institutions placement proceeds:

Amount in (Rs. Source of information / certifications considered by
Sr. No. Name of the Bank Type of account
Crore) Monitoring Agency for preparation of report
1 State Bank of India Fixed Deposit – 2568 10.14
2 State Bank of India Fixed Deposit – 2273 10.14
3 State Bank of India Fixed Deposit – 2035 10.14
4 State Bank of India Fixed Deposit – 1803 10.14
5 State Bank of India Fixed Deposit – 1440 10.14 Chartered Accountant certificate*, Fixed Deposit Receipts
6 State Bank of India Fixed Deposit – 1255 5.00 (FDR), Monitoring Account Statement and Cash credit account
7 State Bank of India Fixed Deposit – 8493 10.12 statement
8 State Bank of India Fixed Deposit – 3614 5.05
9 State Bank of India Fixed Deposit – 0046 6.00
10 State Bank of India Monitoring account 0.04
Total 76.91^

CARE Ratings Limited

9th floor, C-001/A2, Berger Towers, Sector 16B, 4th Floor, Godrej Coliseum, Somaiya Hospital Road,
Noida, Off Eastern Express Highway, Sion (East), Mumbai -
Gautam Budh Nagar, Uttar Pradesh -201301 400 022
Phone: +91-120-4452000 Phone: +91-22-6754 3456
Email: [email protected] , www.careedge.in
CIN-L67190MH1993PLC071691
^ Total unutilized amount is Rs.74.48 Crores and interest of Rs.2.43 Crores earned on FDs, aggregating to Rs.76.91 Crores.

Type of instrument and Amount

Sr. Earning Return on Market Value as at the end
name of the entity invested invested Maturity date
No. (Rs. crores) Investment (%) of quarter
in (Rs. crores)

Fixed Deposit,
1 10.14 March 31, 2024 NA 5.50% NA
State Bank of India

Fixed Deposit,
2 10.14 March 31, 2024 NA 5.50% NA
State Bank of India

NA
Fixed Deposit,
3 10.14 March 31, 2024 NA 5.50%
State Bank of India

NA
Fixed Deposit,
4 10.14 March 31, 2024 NA 5.50%
State Bank of India

NA
Fixed Deposit,
5 10.14 March 31, 2024 NA 5.50%
State Bank of India

NA
Fixed Deposit,
6 5.00 June 25, 2024 NA 5.50%
State Bank of India

NA
Fixed Deposit,
7 10.12 May 22, 2024 NA 5.50%
State Bank of India

Fixed Deposit,
8 5.05 May 23, 2024 NA 5.75% NA
State Bank of India

CARE Ratings Limited

9th floor, C-001/A2, Berger Towers, Sector 16B, 4th Floor, Godrej Coliseum, Somaiya Hospital Road,
Noida, Off Eastern Express Highway, Sion (East), Mumbai -
Gautam Budh Nagar, Uttar Pradesh -201301 400 022
Phone: +91-120-4452000 Phone: +91-22-6754 3456
Email: [email protected] , www.careedge.in
CIN-L67190MH1993PLC071691
 Type of instrument and Amount
Sr. Earning Return on Market Value as at the end
name of the entity invested invested Maturity date
No. (Rs. crores) Investment (%) of quarter
in (Rs. crores)

Fixed Deposit,
9 June 29, 2024 NA 5.75% NA
State Bank of India 6.00

Monitoring Account,
10 0.04 NA NA NA NA
State Bank of India

(iv) Delay in implementation of the object(s)

Completion Date Comments of the Board of Directors
Delay (no. of days/
Objects As per the Placement Proposed course of
Actual* months) Reason of delay
document action
Capital Expenditure July 2025 July 2025 Not applicable
Research and Development Expenditure May 2026 May 2026 Not applicable
Repayment/Prepayment of Short-term
July 2025 September 2023 Not applicable
borrowings
Funding Working Capital requirements Fiscal 2024 September 2023 Not applicable
General corporate purposes From time to time From time to time Not applicable

CARE Ratings Limited

9th floor, C-001/A2, Berger Towers, Sector 16B, 4th Floor, Godrej Coliseum, Somaiya Hospital Road,
Noida, Off Eastern Express Highway, Sion (East), Mumbai -
Gautam Budh Nagar, Uttar Pradesh -201301 400 022
Phone: +91-120-4452000 Phone: +91-22-6754 3456
Email: [email protected] , www.careedge.in
CIN-L67190MH1993PLC071691
5) Details of utilization of proceeds stated as General Corporate Purpose (GCP) amount in the offer document:
Source of information /
Amount certifications considered by Comments of the
Sr. No Item Head^ Comments of Monitoring Agency
in Rs. Crore Monitoring Agency for Board of Directors
preparation of report
The objects of the issue may include, but not restricted
towards strategic initiatives, investments in subsidiaries of our
Company, opening or setting up new offices, business
development initiatives including marketing & branding
expenses, acquiring fixed assets (other than those mentioned
as part of capital expenditure), meeting any expense of our
Chartered Accountant certificate*, Company, including salaries and wages, rent, administration,
General Corporate
1 33.46 Bank statement, and Placement insurance, repairs and maintenance, payment of taxes and
Purposes
Document duties, ESG / renewable energy, meeting expenses incurred
in the ordinary course of business and towards any exigencies.
Accordingly, company has expensed the GCP over ongoing
general corporate expenses.
Rs 33.65 crore has been spent under this head (including Rs
0.19 crore of unutilized issue proceeds which is as per offer
document)
Total 33.46
* Chartered Accountant certificate from Oswal Sunil & Company dated April 20, 2024

CARE Ratings Limited

9th floor, C-001/A2, Berger Towers, Sector 16B, 4th Floor, Godrej Coliseum, Somaiya Hospital Road,
Noida, Off Eastern Express Highway, Sion (East), Mumbai -
Gautam Budh Nagar, Uttar Pradesh -201301 400 022
Phone: +91-120-4452000 Phone: +91-22-6754 3456
Email: [email protected] , www.careedge.in
CIN-L67190MH1993PLC071691