Vahh Chemicals Limited leaves Rs 1.93 crore Surat IPO funds unspent

Vahh Chemicals Limited had spent none of the Rs 1.93 crore allocated from its June 2026 initial public offer, or IPO, to build a manufacturing facility in Surat as of 30 September 2026. Vahh Chemicals reported total gross-proceeds utilisation of Rs 10.89 crore from Rs 13.45 crore, leaving Rs 2.56 crore pending across stated objects.

Why is Vahh Chemicals' Surat facility allocation still unspent?

Vahh Chemicals reported nil utilisation of the Rs 1.93 crore allocated to setting up a new manufacturing facility in Surat, Gujarat, as of 30 September 2026. The full allocation remained pending, even though the IPO prospectus dated 27 May 2026 proposed that amount for use in financial year 2026-27.

The filing does not provide a construction date, project milestone, revised facility cost or operational explanation for the absence of spending. It identifies the Surat project as the “Proposed Facility” and records Rs 1.93 crore as both the amount disclosed in the prospectus and the balance pending utilisation at 30 September 2026.

Vahh Chemicals raised Rs 13.45 crore through a fresh issue of 22.42 lakh equity shares at an issue price of Rs 60 each, including a face value of Rs 10 per share. The basis of allotment was dated 9 June 2026, and the company’s proceeds-utilisation disclosure covered the half year ended 30 September 2026.

The Surat facility balance was the largest single unutilised IPO object at that date. By comparison, only Rs 0.97 lakh remained unspent from the working-capital allocation, Rs 1.78 lakh remained under general corporate purposes, and Rs 0.06 lakh was pending against issue-related expenses.

How did Vahh Chemicals use its IPO proceeds by September 2026?

Vahh Chemicals used Rs 9.07 crore of its Rs 11.63 crore net IPO proceeds by 30 September 2026 and spent Rs 1.82 crore on issue-related expenses. Combined utilisation was Rs 10.89 crore, leaving Rs 2.56 crore of gross proceeds pending utilisation.

The company applied Rs 5.83 crore to incremental working-capital requirements against an allocation of Rs 5.84 crore. It used Rs 2.00 crore for general corporate purposes from a Rs 2.02 crore allocation, showing that both of those objects were nearly fully utilised by the reporting date.

Loan repayment remained partly incomplete. Vahh Chemicals used Rs 1.24 crore from the Rs 1.84 crore allotted to repay company borrowings, leaving Rs 0.60 crore pending. Along with the Rs 1.93 crore Surat-facility balance, this loan-repayment balance accounted for most of the Rs 2.56 crore of unutilised gross proceeds.

The remaining IPO funds were represented by an unused drawing balance in Vahh Chemicals’ cash-credit facility and balances in its bank current accounts. The company said the Rs 2.56 crore remained available for the objects specified in its 27 May 2026 prospectus, rather than being assigned to a new purpose.

Did Vahh Chemicals report a change in its IPO objects?

Vahh Chemicals reported no deviation or variation in the use of IPO funds in its statement under Regulation 32 of the Securities and Exchange Board of India’s Listing Obligations and Disclosure Requirements Regulations, 2015. Every object, including the Surat manufacturing facility, was marked as having nil deviation or variation as of 30 September 2026.

The company said differences between the original allocations and amounts used represented funds that were still unutilised, not a modification of the stated IPO objects. This means the full Rs 1.93 crore for the Proposed Facility remained earmarked for that original project despite no recorded expenditure by the end of September.

Vahh Chemicals also disclosed that a monitoring agency was not applicable to the Rs 13.45 crore public issue. Its deviation-and-variation statement recorded no audit committee comments and no auditor comments in the relevant fields, which were marked not applicable.

MAARS & Associates issued an IPO proceeds-utilisation certificate dated 31 October 2026 for submission to BSE Limited. The certificate set out management’s reported utilisation of Rs 10.89 crore and pending balance of Rs 2.56 crore as at 30 September 2026, subject to completion of the accountant’s examination of books, bank statements and supporting records.

How do the unspent funds compare with Vahh Chemicals' recent results?

Vahh Chemicals reported consolidated revenue from operations of Rs 25.86 crore for the half year ended September 2026, compared with Rs 26.63 crore in the half year ended March 2026 and Rs 16.52 crore in the half year ended September 2025. Revenue was therefore Rs 0.77 crore lower than the preceding half year but Rs 9.34 crore above the year-earlier half year while the Surat allocation remained unused.

Consolidated profit before tax was Rs 4.84 crore in the September 2026 half year, up from Rs 4.20 crore in the March 2026 half year and Rs 2.74 crore a year earlier. Profit after tax rose to Rs 3.62 crore from Rs 3.09 crore in the preceding half year and Rs 2.00 crore in the September 2025 half year.

The chemicals business produced Rs 19.48 crore of revenue in the half year ended September 2026, while the nutraceuticals business contributed Rs 6.38 crore. In the half year ended March 2026, chemicals revenue was Rs 21.85 crore and nutraceutical revenue was Rs 4.78 crore, meaning the chemicals segment declined by Rs 2.37 crore sequentially while nutraceuticals increased by Rs 1.60 crore.

Consolidated cash and cash equivalents stood at Rs 1.19 crore on 30 September 2026, compared with Rs 0.65 crore on 31 March 2026. Consolidated total assets increased to Rs 55.36 crore from Rs 43.87 crore, while external liabilities decreased to Rs 24.29 crore from Rs 28.29 crore; these balance-sheet measures are separate from the disclosed treatment of unutilised IPO proceeds.

Conclusion

Vahh Chemicals had deployed most of its Rs 13.45 crore gross IPO proceeds by 30 September 2026, principally on Rs 5.83 crore of working capital, Rs 2.00 crore of general corporate purposes and Rs 1.82 crore of issue-related expenses. However, the company had not used any of the Rs 1.93 crore reserved for its Surat manufacturing facility, and Rs 0.60 crore of loan-repayment funding was also pending.

The prospectus proposed the full Rs 1.93 crore Surat-facility utilisation during financial year 2026-27. The next proceeds-utilisation disclosure will show whether Vahh Chemicals begins spending on that project and applies the remaining Rs 2.56 crore of gross IPO proceeds, since the 31 October 2026 filing gives no facility timetable, capacity target or revised project cost.